Pioneer faces R1.6bn milling fine

Johannesburg - Pioneer Food Group said on Thursday it has received notification, as anticipated, from the Competition Commission that it has referred its investigation into the white maize milling market to the Competition Tribunal for adjudication.

Pioneer Foods is named as a respondent in the case together with other industry participants.

The Commission has recommended an administrative penalty of 1.6 billion rand or 10% of the 2009 annual group revenue of Pioneer Foods, although the referral refers to conduct up to the 2007 financial year, with respect to the company's alleged transgressions of the Competition Act in the white maize milling market.

Responding to the matter, Pioneer said on Thursday: "As mentioned before, the Company wants to resolve the milling matters and other matters through cooperation with the Commission, and without recourse to proceedings before the Competition Tribunal, if possible. The Company has already met the Commission in this regard.

"The administrative penalty sought by the Commission in the milling matters may be adjusted lower depending on the outcome of continuing negotiations with the Commission. The Company is committed to fully cooperate with the Commission in all investigations where the Commission seeks its assistance.

"The Company is however, of the opinion, that the 2009 annual group revenue used by the Commission in determining the administrative penalty is not the appropriate revenue basis, but that the affected revenue should be used given the Competition Tribunal's judgement in the bread matter as well as the fact that the alleged activities did not take place after 2007."

- I-Net Bridge