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06 Jan 2009 12:48
Food manufacturer and distributor Foodcorp will not contest recent bread price-fixing charges brought against the company by the Competition Commission, the company said on Tuesday.
However, the company said it categorically denied taking part in any market division activity.
Resolution of the Competition Commission’s investigation into the company’s alleged involvement in bread price-fixing was confirmed by the Competition Tribunal on Tuesday, the company said.
In terms of the consent order, Foodcorp agreed to pay a fine of R45-million.
The company said that the fine would be payable in three annual instalments and amounted to 6,7% of Foodcorp’s annual turnover from its bakery operations.
Foodcorp was implicated in 2007 in the bread price-fixing investigation, which included Tiger Brands (Albany), Premier Foods (Blue Ribbon) and Pioneer Foods (Sasko), with charges being brought against the company by the Competition Commission.
Foodcorp said it was “by far” the smallest bread producer of the four, only producing about 6% of the country’s bread.
It added that far-reaching internal corrective measures within the company had been put in place “to ensure that Foodcorp does not find itself in this position again”.
“In addition, we have cooperated throughout with the Competition Commission’s process,” said Foodcorp CEO Justin Williamson.
On the charges of market division and allocation among the milling and baking companies, Williamson said: “Foodcorp categorically denies any charges of wrongdoing in this area.
“Any bakery closures were based purely on the continual decline in the viability of running them.”
Premier Foods was earlier granted immunity from prosecution through its cooperation with the investigation and Tiger Brands was fined over R98-million after admitting guilt.
“Our unwillingness to contest these charges should be seen as evidence of our commitment to ethical dealings since the present structure of Foodcorp was established in 2004.
“We have put measures and processes in place to ensure that our business stands up to scrutiny in the future, and we hope that the Competition Commission will see this in a positive light, as well as accept that, even though we are a small player in the bread market, we have given our full cooperation,” Williamson said.
The Competition Tribunal confirmed the consent order on Tuesday.—Sapa
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