Competition and Consumer Affairs Commission rules against Shipping Association of Guyana in price fixing complaint

Last Updated on Tuesday, 12 February 2019, 16:51 by Writer

The Competition and Consumer Affairs Commission (CCAC) has ruled unanimously against the Shipping Association of Guyana (SAG) in a price fixing case brought by a privately-owned transportation service, that regulatory agency said Tuesday.

The CCAC’s decision brings to an end proceedings stemming from a 2017 complaint against SAG by businessman Mahindranauth Jaikarran, owner of JD Transport Services. The complainant provides haulage service for containers from terminals operated by the members of the SAG.

“Mr.  Jaikarran in his 2017 complaint to the CCAC accused SAG of engaging in anti-competitive behavior by agreeing to collude to fix rates for the haulage of containers from terminals operated by its membership, with the intention of disrupting the natural market flow to the advantage of the SAG,” the CCAC said.

The SAG members who were involved in the issue included Muneshwers Ltd, Demerara Shipping Ltd, John Fernandes Ltd, Guyana National Industrial Company Inc. and Guyana National Shipping Corporation.

The matter was heard by the Commission chaired by Mr. Ronald Burch-Smith, Commissioners Ms. Rosalie Roberston, S.C. and Ms. Pradeepa Bholanath. Evidence was provided by both SAG and Mr. Jaikarran.

The CCAC says evidence presented showed that the terminal operators imposed handling fees for the private haulers which is not charged by the SAG members which gives them “a price advantage vis-à-vis the private hauler, to the extent of the handling fees”.

The Commission in its findings stated that “we are satisfied that the 15th July decision of the Shipping Association and adopted by the 5 terminal operators was an agreement within the meaning of Section 20 of the Consumer Affairs Act. It distorted a competitive environment among terminals for services provided by them to consumers generally, that is to the shipping lines and agents, importers of goods and any person or entity which had the option to exercise choice or influence where their goods were shipped. The private haulers had little choice in this matter, but by imposing the agreed rate on private haulers in a concerted manner distorted competition and gave themselves an unfair and unlawfully implemented advantage.”

The Commission also ruled that SAG members with immediate effect terminate the price fixing agreement which is reflected in the SAG memorandum of 15 July, 2017. Each of the five terminal operators are ordered to pay the sum of $3,843,000 within six weeks of the date of the order.

“Price fixing is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point. This benefits all businesses or individuals that are on the same side of the market involved in the conspiracy, as the prices are either set high, stabilized, discounted or fixed”, the CCAC said.

The CCAC was established in 2006 and became fully operational in 2010. The Commission functions objectively in executing the laws governing two acts, namely the Competition and Fair Trading Act N0. 11 2006 (CFTA) and the Consumer Affairs Act N0. 13 2011 (CAA). The CCAC is an agency of the Ministry of Business.