/ 28 November 2007

Tiger Brands’s R98,7m fine ‘a slap on the wrist’

The R98,7-million penalty imposed on Tiger Brands was too lenient, the Congress of South African Trade Unions (Cosatu) said on Wednesday at a Competition Tribunal hearing in Pretoria.

Cosatu’s national spokesperson Patrick Craven said: ”We want to see measures taken to compel producers to reduce the price of bread to what it would be if there had been no price fixing, so consumers can see some benefit.”

He said manufactures were fixing prices and imposing additional burdens on consumers who were already facing rising prices on many food products.

”Bread in particular is a diet of the poorest and it is appalling that people should enrich themselves by robbing the poor,” said Craven.

Ratula Beukman of the Black Sash organisation called on the Competition Tribunal to impose a fine based on the 12-year price-fixing period. ”We call for tougher legislative measures and actions to stamp out this kind of unethical and unscrupulous corporate business practice behaviour,” she said.

Jody Kollapen of the South African Human Rights Commission said: ”Bread is a basic commodity. The anti-competitive practices involving a basic commodity like bread disproportionately affects the poor. This illegal behaviour may violate the individual’s right to sufficient food.”

In response, Tiger Brands CEO Nick Dennis said: ”Our contravention of section 4 1b of the Competition Act is indeed serious. What happened was not directed from the top. We unreservedly apologise to millions of people affected.”

National Consumer Forum chairperson Thulani Bolani said his organisation welcomed the fine imposed on Tiger Brands. ”This fine is a form of repayment of what it has effectively stolen from consumers and as punishment for breaking the law.”

On November 12, Tiger Brands was ordered to pay a R98,7-million fine by the Competition Commission after admitting to participating in bread and milling cartels.

Competition Commission representative Thulani Kunene said the administrative penalty imposed on Tiger amounted to 5,7% of its national turnover for bread operations for the 2006 financial year.

The company is expected to pay the fine as a one-off payment. — Sapa