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Johannesburg - Pioneer Foods Group [JSE:PFG] said on Tuesday that it had agreed to pay two fines as part of an agreement reached with the competition commission relating to contraventions of the Competition Act.
Pioneer Foods will pay an administrative penalty of R250m to the commission, which will then be transferred to the National Revenue Fund.
It will also pay a sum of R250m to the Industrial Development Corporation, which will be used to promote competition in the agri-processing value chain.
The commission had recommended much higher penalties to the Competition Tribunal.
It had sought administrative penalties of R1.6bn in each of the two milling matters, which would have resulted in a total fine of R3.2bn. That had been calculated as 10% of the Pioneer Food Group annual turnover for the financial year ended September 30 2009.
Pioneer said in a statement to the JSE that the R500m excludes the administrative penalty of R195 718 614, imposed by the tribunal for fixing bread prices and which was paid in April 2010.
As part of the deal made with the commission, Pioneer admitted it had contravened sections of the Competition Act.
It has agreed to cease its anti-competitive behaviour and would not make "any utterances that may reasonably be construed as a threat to enter into a price war or an inducement to raise prices", it said.
Pioneer said it would cooperate with the commission in its prosecution of others.
The tribunal is still to confirm the agreement.
The first instalment of R66 666 667 will be payable within five days of confirmation of the agreement. The next tranche of R216 666 667 becomes payable on the first anniversary of the first payment date, while the final R216 666 667 is to be paid on the second anniversary of the first payment date.
- Fin24
