The Department of Agriculture, Land Reform and Rural Development welcomes the findings of the competition commission following revelations by Premier Foods during the bread cartel investigation that the cartel, price fixing and manipulation, which involved largely the same companies, also covered their milling operations.
The fact that Premier Foods, Tiger Brands, Foodcorp and Pioneer Foods controlled more than 90 percent of the country’s wheat flour market had contravened the Competition Act by engaging in price fixing , collusions and dividing markets by allocating customers who are mostly affected, leaves much to be desired.
This is a clear indication that the interest of some big cooperates is not to ensure food security and availability in the value chain, but to maximise profit margins by stealing from the consumers who in most cases are the poorest section of our society who depends on wheat products for their own survival.
In referring its findings to the Competition Tribunal regarding collusion in the wheat milling market, we are fully behind the sanction that the tribunal must impose an administrative penalty of 10 percent of annual turnover for the 2009 financial year on each of the firms involved, except Premier Foods and Tiger Brands which have been granted conditional immunity, this penalty amount to billions of Rands, which if used wisely, can benefit society in many ways.
We will also continue to advocate and lobby that some portions of these penalties must be channelled to relevant agencies such as the Industrial Development Corporation (IDC) and work towards the development of emerging farmers who are also contributing towards food production, security and availability for our people.
We hope that many of these cases will be uncovered, white collar criminals will be exposed, named and shamed. Well done to the competition commission.
Issued by: Department of Agriculture, Land Reform and Rural Development, Northern Cape Provincial Government
16 March 2010
Source: Department of Agriculture, Land Reform and Rural Development, Northern Cape Provincial Government (http://www.agrinc.gov.za/)
