As the fallout from the bread price-fixing scandal grows, consumers are still not sure exactly what happened, who was responsible and what is being done about it. The executives of Premier Foods and Tiger Brands will have us believe that they knew nothing about the price-fixing and that disciplinary action is being taken against those involved, although the colluders have not been named and their punishment has not been made public.
Meanwhile, Tiger Brands was quick to claim that no consumers were adversely affected by the price-fixing, using a report drawn up by Econometrix to justify the claim. But the Econometrix report was not made public either and competition authorities said they gave no credence to the report.
In fact, during the Tiger Brands consent-order hearing at the Competition Tribunal last month, tribunal chairperson David Lewis stated that he did not understand how Econometrix could have drawn such a conclusion. “I would imagine that Econometrix would want to maintain confidentiality over a report like that. I mean, there is a limit to how much of an idiot you can make of yourself in public,” said Lewis.
But Econometrix director Tony Twine said in response: “To be criticised without being invited to respond, even by a judge, should not be interpreted as having been incorrect.”
Premier Foods, the first company to spill the beans, got away scot-free, avoiding the hefty R98-million fine meted out to Tiger Brands. Its executives were saved the embarrassment of being dragged through cross-examination at the tribunal hearings. Tiger Brands’s Nick Dennis, Ian Isdale and Jimmy Manyi were cross-examined extensively.
It is not surprising, then, that late last week Tiger Brands chief executive Dennis announced he will take early retirement from the group in February next year, claiming it is in the company’s best interests.
Premier Foods’s corporate affairs manager, Steve Mallach, told the Mail & Guardian that all parties involved in the price-fixing scandal had “suffered reputational damage”. Mallach said this week that disciplinary action was taken against Premier Foods employees involved in price-fixing, but refused to provide details. Mallach said that “internal processes” were put in place to ensure collusion of this nature “cannot happen again”.
Meanwhile, the third party alleged to be involved in the price-fixing scandal, Pioneer Foods, is in negotiations with the Competition Commission still and it is unclear if it will settle with the commission or fight the charges.
The M&G understands that the Competition Commission will refer the case involving collusion and price-fixing in the milling industry to the tribunal in January next year.
Fourteen millers are being investigated for suspected collusion, which was uncovered during the investigation into bread price-fixing.
Econometrix and Tiger Brands’s law firm, Edward Nathan Sonnenberg, refuses to release its report into the effects of the bread price-fixing, saying it contains market research data from a respected market research company and is strictly confidential.
Twine, who drew up the report, said: “The conclusion was drawn that any price-fixing that might have taken place at the agricultural, milling, baking or distribution parts of the supply chain have not fed through to any discernible adverse consumer price index.”
The head of the Competition Commission, Shan Ramburuth, said the commission did not give the Econometrix report any credence when finalising the consent order with Tiger Brands. Tiger Brands’s head of corporate affairs, Jimmy Manyi, told the M&G that the company was not trying to defend itself by using the report.