Terminal operators ordered to pay over $3M for breaching consumer laws

Five terminal operators who breached the Consumer Affairs legislation were ordered to pay up over $3 million each as they colluded to fix prices in an effort to exploit customers.
In a statement issued by the Competition and Consumer Affairs Commission (CCAC), the organisation explained that the Commission recently ruled against the Shipping Association of Guyana (SAG) in a price-fixing case in a complaint filed against the SAG by businessman Mahindranauth Jaikarran, owner of JD Transport Services.

Jaikarran, who provides haulage service for containers from terminals operated by the members of the SAG, in a 2017 complaint to the Commission accused the SAG of engaging in anti-competitive behaviour by agreeing 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.
Members involved in the SAG were Muneshwars Ltd, Demerara Shipping Ltd, John Fernandes Ltd, Guyana National Industrial Company Inc and Guyana National Shipping Corporation, the CCAC said.
The agency said the matter was heard by the Commission, led by Commission Chairman, Ronald Burch-Smith; Commissioners Rosalie Roberston, SC; and Pradeepa Bholanath, where evidence was provided by both the SAG and Jaikarran.
“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 a vis the private hauler, to the extent of the handling fees,” the Commission expressed.
Furthermore it said, “We are satisfied that the 15th July decision of the Shipping Association and adopted by the five 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 members of the SAG were ordered by the Commission to terminate the price-fixing agreement which is reflected the SAG’s memorandum of July 15, 2017 immediately and were each 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, stabilised, discounted or fixed”.
In a media engagement held earlier this year, the Commission stressed the importance of businesses not agreeing to compete with their competitors in terms of prices.
Price-fixing, she explained, poses a major disadvantage to customers who are forced to pay a specific price at all supermarkets in an area, as a price would have been agreed to by the business owners.