R99m fine for bread cartel

2007-11-12 15:44

Johannesburg - Tiger Brands (TBS) has been fined R98.8m for its participation in a bread and milling cartel by the Competition Commission, it said on Monday.

The consumer brands company, which makes food brands such as Albany bread and Jungle Oats, said it had reached a settlement with the commission, which involves the fine and its co-operation to assist the commission to prosecute the remaining cartel members.

It has also agreed to implement a compliance programme to eradicate anti-competitive practices in the company.

The major players in the cartel - which operated in the Western Cape - were Sasko, Dues Bakeries, both belonging to unlisted food group Pioneer Foods, and Albany Bakeries - a unit of Tiger Brands.

They are said to have inflated the price of bread to independent distributors in the Western Cape by between 30c and 35c per loaf in December last year.

Both Premier Foods and Tiger Brands applied for leniency from prosecution under the Commission's Corporate Leniency Programme (CLP) in exchange for assisting the Commission in its investigations.

This includes making its employees available as witnesses in prosecutions of the other cartel members. Premier Foods was granted conditional immunity for its participation in cartel activities in both the milling and bread industries.

Tiger Brands, on the other hand, only qualified for immunity in relation to its role in the milling cartel. The administrative penalty imposed on Tiger amounts to 5.7% of its national turnover for bread operations for the 2006 financial year.

The Competition Commission has referred the settlement agreement to the Competition Tribunal for confirmation.

Competition Commissioner Shan Ramburuth said the Commission would seek higher fines for other members of the cartel that had not cooperated; the Tribunal is able to impose a penalty of up to 10% of annual turnover.

- I-Net Bridge