Tiger Foods fined for price-fixing

JOHANNESBURG – South Africa ‘s Tiger Brands has been fined N$98,8 million by the competition commission after South Africa’s biggest food company admitted that it colluded with rivals to fix the price of bread.

Tiger Brands, the maker of Albany bread, was granted leniency against prosecution by agreeing to assist the commission with investigations into matters such as possible collusion among grain millers, the authority said yesterday. Last December independent bread distributors in the Western Cape complained to the commission that bakeries owned by Tiger Brands, Pioneer Foods and Premier Foods had raised prices by between 30c and 35c a loaf a week before Christmas.In February the commission said its investigation found that bread producers had broken the law by colluding.”The anti-competitive activity that took place was completely unacceptable and contrary to our ethical standards,” Tiger Brands chief executive Nick Dennis said in a statement to the JSE on Monday.”The company has accepted full responsibility for the actions of the employees involved.”The fine represented 5,7 per cent of Tiger Brands’ bread sales last year, the commission said.The commission was prosecuting Pioneer Foods, the only producer that had not agreed to co-operate, said Thulani Kunene, the manager of enforcements and exemptions at the competition watchdog.”We’ve had internal discussions with Pioneer,” Kunene said.”Those negotiations did not succeed.They stopped co-operating with us.”The matter will be heard by the competition tribunal, which can impose a fine of as much as 10 per cent of annual sales if a company is found guilty of breaking the Competition Act.Pioneer Foods was still in discussions with the commission, Tertius Carstens, the executive director of the company’s milling and bakery operations, said this week, declining to comment further.Premier Foods, the maker of Blue Ribbon bread, admitted to colluding with the other producers and was granted leniency against prosecution, the commission said in February.Following its own investigation, Tiger Brands had informed the commission about collusion in the milling industry, for which the company would not be prosecuted, the competition authority said.The company’s investigation was conducted by law firm Edward Nathan Sonnenbergs and Econometrix, an economic consultancy based in Johannesburg.The study by Econometrix found “no evidence that consumers had been adversely affected” by the bread price-fixing, Tiger Brands said.Business ReportLast December independent bread distributors in the Western Cape complained to the commission that bakeries owned by Tiger Brands, Pioneer Foods and Premier Foods had raised prices by between 30c and 35c a loaf a week before Christmas.In February the commission said its investigation found that bread producers had broken the law by colluding.”The anti-competitive activity that took place was completely unacceptable and contrary to our ethical standards,” Tiger Brands chief executive Nick Dennis said in a statement to the JSE on Monday.”The company has accepted full responsibility for the actions of the employees involved.”The fine represented 5,7 per cent of Tiger Brands’ bread sales last year, the commission said.The commission was prosecuting Pioneer Foods, the only producer that had not agreed to co-operate, said Thulani Kunene, the manager of enforcements and exemptions at the competition watchdog.”We’ve had internal discussions with Pioneer,” Kunene said.”Those negotiations did not succeed.They stopped co-operating with us.”The matter will be heard by the competition tribunal, which can impose a fine of as much as 10 per cent of annual sales if a company is found guilty of breaking the Competition Act.Pioneer Foods was still in discussions with the commission, Tertius Carstens, the executive director of the company’s milling and bakery operations, said this week, declining to comment further.Premier Foods, the maker of Blue Ribbon bread, admitted to colluding with the other producers and was granted leniency against prosecution, the commission said in February.Following its own investigation, Tiger Brands had informed the commission about collusion in the milling industry, for which the company would not be prosecuted, the competition authority said.The company’s investigation was conducted by law firm Edward Nathan Sonnenbergs and Econometrix, an economic consultancy based in Johannesburg.The study by Econometrix found “no evidence that consumers had been adversely affected” by the bread price-fixing, Tiger Brands said.Business Report