1. Art and Diseño

Mexican policy reforms hold important lessons for SA — Ann Bernstein
Page 7
BusinessDay
Tuesday February 3 2015
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Déjà vu as AU
imitates OAU
Page 6
.................................................................................................................................................
MARVIN MEINTJIES
Remember to
keep sight of all that’s right Page 7
TRUDI MAKHAYA Spazas need to
Page 7
adapt to new landscape
.................................................................................................................................................
Inside
Producers ‘to feel pain of
load shedding and strikes’
ACTIVITY in the manufacturing sector improved
last month, though load shedding and strikes will
weigh on output potential, Manufacturing Circle
executive director Coenraad Bezuidenhout said
yesterday, after the release of the Kagiso PMI.
Employment in the sector is also likely to stay
subdued as producers are increasingly using more
machines and less labour. Page 2
Selebi case review rejected
THE National Prosecuting Authority yesterday
poured cold water on attempts to have the case
against deceased former police commissioner
Jackie Selebi reviewed. Page 3
Limpopo regains
its departments
T
HE Treasury has transferred the five
provincial departments it has been
running since 2011 back to the Limpopo
government.
The presence of administrators was the
cause of tension with the province. The transfer
was made under a memorandum that requires
the province to comply with Treasury directives
for better financial management.
Premier Stan Mathabatha has complained
about being a “shadow premier” without full
control over his government. There were also
complaints about multiple centres of power and
a lack of co-ordination.
Full report: page 2
Group Five expects earnings drop
GROUP Five said yesterday its earnings for the six
months ended December could halve due to a
slower order intake, contract losses and
restructuring costs. Page 10
Coca-Cola outperforms its bottler
COCA-Cola shares are outperforming Coca-Cola
Enterprises as investors bet earnings will
accelerate more for the soft-drink maker than for
its international bottler this year. Page 11
Bulls ready for Super Rugby
THE Bulls are looking forward to the start of the
Super Rugby season in two weeks’ time following
their impressive showing in the 39-26 victory over
English side Saracens at the weekend. Page 15
Klate eyes prospects at United
DAINE Klate, who joined SuperSport United on
loan last week, says his move has a lot to do with
the opportunities he will have at the club when he
retires. Back Page
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Tax the rich Obama’s proposed budget draws battle lines Page 4
US President
Barack Obama
delivers
remarks on
the budget for
the 2016 fiscal
year in
Washington
yesterday.
Mercedes’s C-Class boosts figures
DAVID FURLONGER
Editor at Large
MOTOR companies and banks are
split over whether positive economic indicators and tumbling
fuel prices are creating a positive
environment for domestic newvehicle sales this year.
But while they wait to see
which way the South African market goes, export sales are already
booming. Exports of locally built
cars shot up 84.4% last month,
compared to January last year.
The rise was fuelled partly by
Mercedes-Benz SA, which was not
exporting — or even building —
cars at the beginning of 2014,
while it switched over to a new CClass model. Last month it
exported 2,479.
But it was not the only car maker to improve. Total January-onJanuary car shipments grew from
6,021 to 11,104, helped by a weak
rand and the continued recovery
in demand in major northern
Consumers know
this fuel-price
honeymoon can’t last
hemisphere markets.
The same could not be said of
light commercial (mainly bakkie)
exports, which tumbled 28% —
from 7,732 to 5,578 — according to
figures compiled by the National
Association of Automobile Manufacturers of SA (Naamsa).
Toyota SA president Johan van
Zyl said yesterday the fall might
not be short-term. Most South
African bakkie exports were to
other African countries, some of
which had changed their policies
on vehicle imports. Algeria, a
major South African customer,
had curtailed government support
for companies buying commercial
vehicles, while Nigeria was raising
import duties as it began to create
its own motor industry.
Algeria and Nigeria were hit
hard by falling oil prices. As in
Angola, the loss of oil revenue was
prompting them to cut government spending budgets.
Dr van Zyl, who heads the global Toyota group’s African division, said other African countries
were cutting imported vehicle
orders in expectation of currency
depreciation.
As a result, combined exports
of all new vehicles grew 20.7%,
from 13,845 to 16,708. Naamsa
predicts the full-year figure will
reach at least 320,000, a 15%
improvement on 2014’s 276,404.
In the domestic market, total
new-vehicle sales last month were
down 1.2%, from 52,948 to 52,306.
Light commercials were up 6%
but cars dipped 3.6%. Medium
commercials fell but heavy trucks
continued to grow.
Given that January was effectively half a sales month after the
Christmas holidays, analysts
pointed out yesterday that it was
too early to draw conclusions.
But Naamsa director Nico Vermeulen said this week’s release of
the latest purchasing managers’
index, indicating an improvement
in business conditions in the factory sector, was a positive sign for
vehicle sales in the short to medium term.
The Reserve Bank’s leading
indicator for November, implying
better economic growth and lower
inflation in the next few months,
was added cause for hope.
Mr Vermeulen suggested the
continued drop in fuel prices
would benefit the market.
But Nicholas Nkosi, head of
vehicle and asset finance at Standard Bank, did not share his optimism. “I think the extra disposable income resulting from fuel
prices will benefit the used-car
market, which I think will show a
strong performance in 2015. Newcar prices will still be driven by the
weak rand.”
Simphiwe Nghona, executive
head of WesBank’s motor division,
doubted that South African consumers would be seduced into
buying new cars by lower fuel
prices. “When you buy a car, you
buy into a long-term contract,” he
said. “Consumers know this fuelprice honeymoon can’t last
indefinitely.”
Still, he and Mr Nkosi agreed
with Mr Vermeulen that economic
conditions were generally favourable for the market — particularly now that interest rates
seemed set for further stability.
However, they said there were
no market signals yet to back up
Mr Vermeulen’s view that proposed changes to fringe benefits
tax on company cars, due to take
effect on March 1, would lead to
pre-emptive buying this month.
Investec said yesterday that
high household debt and low consumer confidence would continue
to “curtail consumers’ ability and
willingness to spend”.
[email protected]
Picture: EPA,
KRISTOFFER
TRIPPLAAR
SAB wins decade-long distribution case again
NICK HEDLEY
Industrial Writer
THE Competition Commission’s
decade-long distribution case against
brewer SAB has been thwarted once
again, this time by the Competition
Appeal Court.
The commission’s appeal was dismissed with costs in a judgment handed down in Cape Town yesterday,
meaning its last option would be an
appeal at the Constitutional Court.
Competition commissioner Thembinkosi Bonakele said “we haven’t
decided yet” whether or not to refer
the case to SA’s highest court.
The Competition Commission was
appealing against the Competition
Tribunal’s decision last year not to
abolish SAB’s exclusive territorial
agreements with its 13 appointed
distributors.
While 90% of SAB’s distribution is
done through its own depots, the
remaining 10% is done through
appointed distributors across the
country. This portion has been under
the spotlight since a complaint was
made by an independent liquor distributor in 2004.
Long delays followed the referral
of the case in 2007 to the tribunal,
mainly due to procedural challenges
put up by SAB. Its first successful
attempt to get the case dismissed was
put on ice when the commission
appealed to the tribunal. When the
Lawyers hired to
probe SAA CEO
Chairwoman refuses to specify charges
ANDISWA MAQUTU
Transport Writer
LAW firm ENS has been retained
by South African Airways (SAA) to
investigate unspecified charges
against its CEO, Monwabisi
Kalawe, according to SAA chairwoman Dudu Myeni.
Mr Kalawe has been suspended for the past three months.
SAA was still not able to say
publicly what Mr Kalawe had been
accused of, or was being investigated for, because the matter was
“very sensitive”, Ms Myeni said in
an interview last week.
The Treasury, the airline’s new
shareholder, has demanded SAA
straighten out its prolonged
governance problems as part of an
agreement it reached with the
airline in order to give it a
guarantee of R6.5bn.
The Treasury intends to
appoint a new board before the
end of next month to replace the
four-member interim board.
The interim board was
installed as an emergency measure after several members of the
former board resigned.
Ms Myeni and her close ally
Yakhe Kwinana remained after
the last board collapsed.
The other two members of the
interim board are Anthony Dixon,
an accountant, and aviation
specialist John Tambi, both
appointed by Public Enterprises
Minister Lynne Brown.
Ms Myeni and Ms Kwinana
were cited in a letter signed by six
of the former board’s independent
directors as being the reason
Continued on page 2
Editorial: page 6
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Strauss-Kahn goes on trial for pimping
FOREIGN STAFF
Lille
FORMER International Monetary Fund chief
Dominique Strauss-Kahn went on trial yesterday on charges of pimping, four years after
a sex scandal cost him his job and a shot at the
French presidency.
The disgraced 65-year-old economist
found himself back in the dock — this time in
the northern French city of Lille — accused of
being at the centre of a vice ring that hired
prostitutes for sex parties in Brussels, Paris
and Washington.
He settled a 2011 case of alleged sexual
assault of a hotel maid in New York.
Mr Strauss-Kahn appeared on edge as presiding Judge Bernard Lemaire read out the
charges against him and 13 co-accused, a
colourful cast of characters including luxury
hotel managers, a former police commissioner, and a brothel owner nicknamed
“Dodo the Pimp”. Lurid details of group sex
and high-end prostitution are likely to emerge
in the trial for “aggravated pimping in an
organised group”, a charge punishable by up
to 10 years in prison and a fine of up to €1.5m.
Prostitution is legal in France but procuring, the legal term for pimping which includes
IN THE DOCK:
Dominique
Strauss-Kahn is
on trial four
years after a sex
scandal cost him
his IMF job.
Picture: REUTERS
encouraging, benefiting from or organising
prostitution, is punishable with jail time.
The crux of the case is whether Mr StraussKahn knew the women lavishing their attention on him were prostitutes and whether he
had a role in organising their presence.
Mr Strauss-Kahn admits to being a “libertine” who enjoys orgies but has steadfastly
denied knowing the women were paid.
“In these circumstances one isn’t always
clothed, and I challenge you to tell the difference between a prostitute naked and any
other woman naked,” his lawyer Henri
Leclerc said in 2011.
But even prosecutors have been divided
over whether Mr Strauss-Kahn was more
pimp than casual consumer. In 2013 state
prosecutor Frederic Fevre called for the
charges to be dropped, but investigating
judges overruled him. AFP
case’s dismissal was upheld by the
tribunal, the commission took the
next step in the process by turning to
the Competition Appeal Court.
Lara Granville, a director at law
firm Norton Rose Fulbright, which
represented the appointed distributors, said the decision provided “welcome clarity for dominant firms in SA
regarding how they choose to structure their distribution”.
She said there had been, until now,
uncertainty about how competition
law should view a company that distributed its own product and also
appointed external distributors.
“The issue was whether that raises
price-fixing or market allocation concerns. The Competition Appeal Court
has now clarified that these arrangements need not be considered as automatically illegal.”
The Competition Appeal Court
found that the commission had failed
to prove that SAB’s distribution
arrangements were anticompetitive
in that they inflated prices or reduced
service levels.
The commission’s case is based on
price discrimination, market allocation and retail price maintenance. The
commission has argued that SAB had
appointed distributors and given
them exclusive territories in which to
distribute its products‚ thus restricting competition between the various
appointed distributors.
[email protected]