Firm denies profiting from price-fixing

Tiger Consumer Brands, which owns Albany Bread, did not profit from the fixing of the price of bread, the company said on Tuesday.

“The company did not benefit from the price-fixing. I don’t know who did, but we did not,” said spokesperson Jimmy Manyi.

Manyi said an agreement was reached with the Competition Commission for Tiger Brands to pay an administrative penalty of R99-million.

The company had admitted to participating in bread and milling cartels, the commission announced on Monday.

Tiger Brands had also agreed to assist the commission in prosecuting remaining cartel members who had not cooperated with the commission.

The company would implement an in-house programme to eradicate anti-competitive practices.

Said Manyi: “The Econometrix report—which is [an] independent report—found no evidence of price increases and this was a relief to Tiger Brands.

“The increasing wheat and oil prices were other variables that compound the price of bread”.

Manyi said labour, fixed overheads and logistics were among factors taken into consideration when determining the price of bread.

He said a statement by their chief executive officer Nick Dennis that there was no evidence of abnormal pricing, nor were consumers adversely affected, was not an opinion, but a fact from an investigation.

The Congress of South African Trade Unions (Cosatu) on Tuesday said it applauded the commission’s verdict that Tiger Brands was guilty of price fixing, in collusion with the other companies that dominated the baking industry.

They also applauded the imposition of the fine. 

“Justice has been done, although it will be small comfort for the poor consumers who are being battered by relentless price rises,” said Cosatu spokesperson Patrick Craven.

Cosatu agreed with the South African National Consumer Union that the fine was “too lenient a punishment”, as it would be absorbed into companies’ operating expenses and ultimately passed on to the consumer in higher prices.

“Ironically the workers who produce and process the food, on the farms and in the bakeries, are among those hit hard, because they never see in their wage packets any of the extra money which Blue Ribbon, Tiger Brands and the other producers have made from their illegal profits,” Craven said.

Manyi responded that those who thought the fine was too lenient were entitled to express their opinions.

The investigation into price-fixing was in response to a complaint filed last year by Cosatu and Imraahn Ismail-Mukaddam, an independent Western Cape bread distributor.

This was after the three big companies—Albany, Sasko and Blue Ribbon—simultaneously announced price rises in December 2006.

When Albany Bakery again increased the price of its bread by 45c a loaf in August this year, Cosatu urged the government to conduct an inquiry into whether there was any price-fixing to keep prices high.

South African National Consumer Union chairperson Lilibeth Moolman was reported as saying the commission wanted a 10% penalty imposed on Pioneer Foods because of the company’s non cooperation.

She said the consumer would, in the short term, not see a drop in the price of bread. - Sapa

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