Nicola Mawson
6 January 2009
Johannesburg — FOOD producer Foodcorp has agreed to pay a R45,4m fine for its role in a bread cartel, but still faces prosecution for a possible role in a milling cartel.
The Competition Commission's investigation into a bread and milling cartel swept up four producers. Now only Pioneer Foods has yet to settle with the commission. A Competition Tribunal hearing is scheduled for mid-June.
Foodcorp, majority owned by Pamodzi Investment Holdings, admitted that Sunbake Bakeries was engaged in fixing the price of bread sold to consumers.
Foodcorp agreed to pay an administrative penalty of R45,4m, which represented 6,7% of its turnover from all its baking operations for the 2006 financial year.
The fine, which has still to be ratified by the tribunal, follows an investigation into the bread and milling industry after a complaint in December 2006 about alleged price fixing and market allocation practices in Western Cape.
The complaints from bread distributors alleged Premier Foods, Tiger Brands and Pioneer Foods were involved in setting prices and dividing the market among themselves.
Foodcorp was later included in the national investigation.
Premier Foods applied for leniency, and in November 2007 Tiger Brands agreed to a R99m fine .
Nandisile Mokoena, the commission's manager of strategy and stakeholder relations, said yesterday that Foodcorp was fined for its role in national price fixing and market allocation of bread.
The milling investigation was continuing , and the group could be prosecuted as it was a respondent in the milling case.
Foodcorp CEO Justin Williamson confirmed that the unlisted company had entered into an agreement, but would not comment until the agreement was ratified.
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