Number plate cartel allegedly taking motorists for a ride in South Africa

A group of companies that manufacture vehicle licence plates in South Africa are being prosecuted for allegedly engaging in price fixing and customer exploitation.

The Competition Commission recently noted that the three accused companies – Uniplate, Unique Number Plate, and New Number Plate Requisites (NNPR) – manufacturer number plate blanks.

This refers to unfinished and unprinted vehicle registration plates that will be used to create official licence plates.

These plates are typically made from materials like Perspex or aluminium.

According to the investigation, the three companies formed a cartel and colluded to fix prices on number plate blanks supplied to customers across South Africa.

“They are alleged to have entered into an agreement and/or engaged in a concerted practice to fix prices and trading conditions for the supply of number plate blanks to, among others, embossers,” said the commission.

This practice dates back to at least June 2023, meaning that, if the allegations are true, motorists have been paying artificially inflated prices for almost three years.

The report further claims that drivers in KwaZulu-Natal were worse-affected than others, as the cartel isolated and specifically targeted the province.

“The companies further agreed to impose a surcharge of R10 on all number plate blanks sold in KwaZulu-Natal,” it said.

One of the three companies, Uniplate, is the considered the biggest producer and distributor of licence plate blanks and embossing machines in South Africa.

The company agreed on the amounts and dates for price increases, and coordinated when each would issue price increase letters.

All three companies are now being referred to prosecutors in the Competition Tribunal over these alleged practices.

If they are successfully convicted of contravening section 4(1)(b)(i) of the Competition Act, they will be liable to pay an administrative penalty of up to 10% of their respective turnover. 

Not the first time Uniplate has been before the Competition Tribunal

In 2019, Uniplate was fined R16 million for a similar yet unrelated matter, as the Competition Tribunal determined the company was exploiting its position as a monopoly.

The commission noted that Uniplate was using long-term exclusive agreements to contractually force its customers who bought its embossing machines to also purchase its number plate blanks.

“The exclusive supply agreements tied up customers for a period of 10 years and prevented the customer from switching to alternative suppliers of number plate blanks,” it said.

“Customers who were tied in these exclusive agreements by Uniplate were similarly unable to access competitor blanks even when competitors’ prices were lower.”

The commission stated at the time that it had received similar complaints about the dealings of NNPR as far back as 2012.

Our sister publication MyBroadband has contacted the accused firms for comment, which will be added if received.