Pioneer may face another fine

Johannesburg - Pioneer Food [JSE:PFG] said on Friday that it wants to bring the matter regarding the Competition Tribunal's decision earlier this month to impose a fine of R196m in respect of the bread related matter to a swift close. Further announcements will follow in due course.

In addition, at the end of 2009 Pioneer Foods was informed by the Commission that it had concluded its investigation into the maize and wheat milling industries and would soon be referring the matter, in which Pioneer Foods was named as a respondent, to the Competition Tribunal for adjudication.

Although the Commission has not to date issued a complaint referral with regard to the milling matter, it has invited Pioneer Foods to discuss the settlement of the matter. The company has met representatives of the Commission in this regard.

"Should settlement discussions be successful, it is anticipated that Pioneer Foods could pay an administrative penalty in accordance with the provisions of the Competition Act, in addition to the bread case penalty," Pioneer's Chairman said in a statement at the company's AGM.

The company said while it is premature at this time to determine with certainty the quantum of such a potential penalty, the Tribunal in its decision in the bread case based the administrative penalty on 10% of the 2006 national bakery revenue.

Should the same principle be applied in this matter, a maximum penalty based on 10% of the 2006 national revenue from maize and wheaten flour sales may be handed down. Revenue from wheaten and flour sales for 2006 was R1.8bn, it said.

Pioneer is committed to fully cooperate with the Commission in all investigations where the Commission seeks its assistance resolving any other competition related matters, it added.

Pioneer Foods has conducted an internal investigation, with the assistance of external advisors, in respect of its operations in the maize and wheat milling industries. The investigation is ongoing.

"The Company wants to resolve this matter through cooperation with the Commission, and without recourse to proceedings before the Competition Tribunal, if possible. In this instance, Pioneer Foods has met representatives of the Commission and intends to respond formally to the Commission's invitation to engage in discussions and cooperate with the Commission with a view to reaching a settlement," it said.

- I-Net Bridge