Yesterday, 9 September 2009, the Competition Tribunal heard closing arguments by the Commission and Pioneer Foods following a national price fixing cartel in the bread industry spanning almost a decade.
David Unterhalter, the Commission's advocate, said Pioneer's defence that bread producers were only sharing historical information and not fixing prices, did not hold water.
“Even [Premier Foods Cape regional director Dennis Lavery] himself stated that in 2006, ‘a 35% price would be adhered to going forward' in his testimony,” he said.
“This amounts to price fixing.”
He said the producers were embroiled in a two-year price war until 2003, leading to various meetings aimed at “bringing stability” to the market.
Andries Goosen, general manager of Sasko Bakery [Pioneer], a key defence witness, was unable to stem the tide of evidence against the company.
He went from claiming outright that the company was innocent of collusion to denying his own personal knowledge of wrong-doing and finally admitting that the company was involved in price fixing over a limited region rather than nationally.
David Donovan, Cape regional sales manager at Premier Foods, provided a detailed account of a December 2006 meeting attended by all four producers where the bread price increases were discussed.
Following this and a series of other meetings, the various bakeries all implemented price increases of 35 cents per loaf.
Nandi Mokoena, Competition Commission manager of strategy and stakeholder relations, said the Tribunal would announce its decision within “a few weeks”.
Though fellow cartel members have already paid penalties to the Tribunal, Pioneer was the only member to fight prosecution, leading to a drawn-out hearing that revealed previously unheard details of the cartel's dealings.
Both Tiger brands and Foodcorp have already made settlements of R98-million and R45-million, respectively, while Premier Foods earned corporate leniency in exchange for damaging testimony.
Source: The Times
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