Small sawmillers are suffering from price discrimination to secure timber supplies from Komatiland Forests (KLF), a South African competition tribunal hearing has heard.
The hearing, which is looking into the proposed takeover of KLF by the Bonheur Consortium, heard that long-term contract holders were paying lower prices than small mills buying timber in a spot market bidding process.
However, KLF chief operating officer Stephanus du Plessis said moves had been made to bring prices more in line.
He said there was currently a 15-20% gap between short and long-term contract prices but the gap had risen to 60% last year because of pressure on short-term contract holders.
The tribunal also heard evidence of the merger already being implemented in the form of Bonheur executives attending KLF management meetings.
If approved, the merger would see Bonheur acquire 75% of the South African Forestry Company’s holding in Komatiland.
