South Africa’s Foodcorp faces a fine of ZAR45m (US$4.8m) after the country’s Competition Commission ruled that a number of leading manufacturers colluded to fix the price of bread.
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Foodcorp and the Competition Commission have reached a settlement that was referred to the Competition Tribunal today (6 January) for approval.
“Following an internal investigation, we have decided not to contest the Commission’s findings,” a Foodcorp spokesperson told just-food.
However, the spokesperson “categorically denied” taking part in “market division” activities.
The fine of ZAR45m represents 6.7% of Foodcorp’s turnover from its baking operations in fiscal 2006.
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By GlobalDataThe South African Competition Commission started an investigation in December 2006 after receiving complaints from bread distributors in the Western Cape alleging price fixing and market allocation by Premier Foods Ltd, Tiger Brands and Pioneer Foods.
The investigation was later expanded to include price-fixing activity throughout South Africa and to look at Foodcorp as a perpetrator.
In 2007, the Commission concluded that between 1995 and 2006 Premier Foods, Tiger Brands, Pioneer Foods and Foodcorp were involved in price fixing and market allocation activities.
“The commission found that they held telephonic discussions and meetings where they directly fixed the selling price of bread; directly fixed the dates when such agreed price increases would be effective; and divided markets by allocating territories where each firm would be the only one operating a bakery in a particular territory and supply all distributors in the area,” the Commission said in a statement.
Foodcorp said that it has since taken internal measures to address issues within the company and prevent the possibility of a similar scandal in the future.
