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Pioneer to fight bread price case

By Zweli Mokgata | Jun 17, 2009 | COMMENTS [ 0 ]

PIONEER Foods will today kick off its R1billion battle with the competition commission over its alleged involvement in a bread price-fixing scandal.

Unlike its competitors Tiger Brands and Foodcorp - who have settled their cases for R98million and R45million, respectively - Pioneer has long proclaimed its innocence since complaints over the operation of a bread cartel were received in 2006.

The first complaint was lodged against Tiger Brands and Pioneer about bakeries in the Western Cape.

The second was against Pioneer and Foodcorp. In this matter Premier Foods cooperated with the commission in exchange for corporate leniency, and provided damning information on a nationwide cartel that had fixed prices and divided markets since 1999. Pioneer has historically denied any involvement in the cartel, saying bread prices increased at the same time because all producers share the same input costs.

The company will ask the competition tribunal to dismiss the case without costs.

Funeka Beja, a foods analyst at Afena Capital, said: "The others, Tiger and Foodcorp, might also not have been guilty but settled because it would have been too much trouble to try fighting the case."


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