A FINE of R500 million will be paid by Pioneer Foods to the Commission in full and final settlement of alleged contraventions of the Competitions Act regarding bread and milling matters.
The parties have filed an application with the Competition Tribunal for confirmation of the Settlement Agreement which will be heard as soon as possible.
The fine of R500 million is in addition to the administrative penalty of R195 million imposed by the Tribunal in the Bread matter, which was paid by Pioneer Foods in April this year.
In addition, Pioneer Foods will reduce its gross profit over a defined period in respect of a selection of defined wheaten flour and bread products.
The pricing commitment will amount to a reduction of R160 million in gross profit when benchmarked against an agreed base period. This will benefit the consumer should the reductions be passed on through the trade.
Appropriate action has been taken by the Board of Pioneer Foods to discipline management responsible for the Competition Act transgressions.
Pioneer Foods will not reduce its committed capital expenditure of R1 228 million from 2010 to 2013 as a result of the Settlement Agreement, and further commits to increasing the capital expenditure by a further R150 million.
This expenditure is linked to certain anticipated capital programmes, subject to economic, market and other conditions, which will assist in job creation as delivery capacity grows.
Pioneer Foods agrees to co-operate fully with the Commission in its prosecution of any other parties.
