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Abalone Farmers Association Granted Conditional Exemption

October 28, 2019

Department of Economic Development

28 October 2019

The Competition Commission has granted the Abalone Farmers Association (AFASA) a conditional exemption.

The economic department published notification of the exemption in Government Gazette 42794.

The conditional exemption applies for a period of 1 year, effective from 1 October 2019 up to 30 September 2020.

AFASA first applied, in June 2016, for an exemption from certain provisions of Chapter 2 of the Competition Act for a period of ten years.

AFASA wants to engage in meetings and communicate on prices and market conditions as competitors in the abalone industry.

“The engagements will involve the Applicants coordinating their efforts in respect of sales into certain international markets through sharing information on prevailing prices, feedback regarding information received from agents on prices, estimates of abalone stock available, volumes of abalone product exported and the volumes of abalone stockholding of the international competitors.”

The exemption is perceived to assist with the maintenance or promotion of exports.

At the end of 2018, the Competition Commission met with AFASA to discuss the need for an abalone industry transformation plan as transformation in the industry was inadequate.

AFASA submitted, in July 2019, an Industry Transformation Plan in support of its exemption application.

This led to the Commission granting the one-year conditional exemption.

“The Commission will continue to monitor the impact of the exemption on the abalone industry and the implementation of the Industry Transformation Plan by AFASA in order to decide on the next course of action.”

One of the conditions is that AFASA will spend R 5 million per year on 1 100 HDIs on general training and at least R 2.4 million on training at tertiary level on HDI employees at management level during the exemption.

Another condition is that the Abalone Export Council, in conjunction with AFASA, must jointly submit a report to the Commission at the end of the eleventh month of the exemption detailing the extent to which they have implemented the Industry Transformation Plan and have complied with the conditions.

Included in the report must be the abalone export prices and volumes and detail on how the exemption has enabled historically disadvantaged individuals to enter and/or participate in the abalone industry.