Tiger Brands was fined R98,8m by the country’s competition authority after admitting that it colluded with rivals to fix the price of bread.
The company was granted leniency against prosecution by agreeing to assist the Competition Commission with investigations into matters such as possible collusion amongst grain millers, the commission said in a statement yesterday.
Independent bread distributors in the Western Cape province complained to the commission in December last year that bakeries owned by Tiger Brands, the maker of Albany bread, Pioneer Foods and Premier Foods had raised prices by between 30c and 35c a loaf a week before Christmas. The commission said in February that its investigation found that bread producers broke the law by colluding.
“The anti-competitive activity that took place was completely unacceptable and contrary to our ethical standards,” Tiger Brands CEO Nick Dennis said yesterday. “The company has accepted full responsibility for the actions of the employers involved.”
The fine represents 5,7% of Tiger Brands’ bread sales last year, the commission said. Other cartel members, who haven’t cooperated with the commission’s investigations, face penalties of as much as 10% of annual sales, it added.
Tiger Brands informed the commission about collusion in the milling industry following its own investigation, for which the company won’t be prosecuted, the commission said.
The company’s investigation was conducted by law firm Edward Nathan Sonnenbergs and Econometrix. The study by Econometrix found “no evidence that consumers had been adversely affected” by the bread price-fixing, Tiger Brands said.
Premier Foods, the maker of Blue Ribbon bread, admitted to colluding with the other three producers, the commission said in February, and was granted leniency against prosecution.Andre Hanekom, MD of Pioneer Foods, wasn’t available to comment.