THE automotive industry this week lost a landmark court case which may see the country's tyre industry forced to increase prices in order to lessen the impact to their bottom line.
This comes after a Retail Motor Industry (RMI) court case to stop the implementation of government's controversial waste tyre management plan was dismissed.
The tyre industry is now forced to comply with the plan, paying levies towards the Recycling and Development Initiative of SA (Redisa), which the RMI had hoped to avoid.
The RMI's case was dismissed with costs by the High Court in Pretoria on Wednesday. The court found that Water and Environmental Affairs Minister Edna Molewa was entitled to withdraw and reissue the Redisa plan.
Goodyear SA group public relations manager Lize Hayward said the company would adjust pricing to minimise the impact on its bottom line.
"Goodyear will effect payment of the Redisa fees in accordance with the Redisa waste tyre management plan," she said.
Continental Tyre SA corporate communications manager Gishma Johnson said while the company had to subscribe to the Redisa plan, it was still a member of the South African Tyre Recycling Process (SATRP) and had invested over many years in its waste management plan.
"We need a plan which is well managed and which is not putting too much additional burden onto the tyre industry which is already faced with ongoing huge price increase in electricity, steam, etc."
Johnson said any extra taxes and levies, such as the Redisa levy, created an additional cost to the company which in effect made it less and less competitive when vying for business on international markets. Barnard Incorporated attorney Douw Breed, representing the RMI, said he was preparing an application for leave to appeal.
"We expected that the minister would withdraw and reissue the plan. We do not want to disclose the grounds for our application for leave to appeal at this stage but it is not just the RMI that believe this plan is flawed – various stakeholders are gravely concerned," he said.
Vishal Premlall, national director of the Tyre Dealers and Fitment Association, an RMI member, said the organisation was disappointed with a number of the determinations in the judgment.
"It should be reiterated that the RMI remains committed to contribute to waste tyre management in a fair, transparent and effective manner. This has resulted in the RMI joining forces with the major role players in the industry to develop a new waste tyre management plan which should be submitted in due course."
Redisa chief executive Hermann Erdmann said: "We are, of course, very pleased with the outcome, which vindicates our position completely.
"Every challenge thrown at us by the tyre industry has been thrown out by the courts; even the one point on which the temporary interdict was granted in November last year has been overturned."
Erdmann said the court cases brought against Redisa by players in the tyre industry had done nothing but cost millions in legal fees and result in lost man-hours and delays in the implementation of waste tyre management.