Pioneer gets sliced by Competition Tribunal
2010-02-11
THE Competition Tribunal last week imposed a penalty of R195 718 614 on food giant Pioneer for its role in a bread cartel, and has ordered the group to desist from such conduct in future. Pioneer Foods has been given 20 business days to appeal against the penalty. Leon Cronjé, financial director of Pioneer Foods in Paarl, said that Pioneer would react to the Tribunal’s verdict after studying it. The Competition Tribunal imposed the penalty on the group last week for its involvement in a bread cartel that included four major bakeries which produce Albany, Blue Ribbon and Sunbake loaves. The tribunal found that Pioneer, which owns the Sasko brand, enjoyed a market share, together with the other bakeries, of between 50% to 60% of the domestic bread market in South Africa. The National Consumer Forum’s Thami Bolani says prison terms for top management officials should be part of penalties to stop companies from engaging in these illegal activities: “This is not the first company to receive such a penalty, but its is clear that this is not enough, it is not discouraging big companies from engaging in these illegal activities. “And therefore prison terms for top management in terms of the new competition amendment act will in our opinion stop these companies getting involved in price collusion,” he said. The case concerns two complaint referrals brought against Pioneer: one of a bread cartel operating in the Western Cape, and a second of a bread cartel operating in an inland region. During 2007 Premier Foods sought leniency from the commission for its role in the cartel. Tiger and Foodcorp subsequently negotiated agreements with the commission, in which they agreed to pay fines. Pioneer opted to fight the case before the tribunal. The administrative penalty of R195m amounts to 10% of the national bread turn over of Sasko (a Pioneer division) in 2006.
More
News
|
