Premier Milling, a subsidiary of investment holding company Brait and owner of Snowflake Flour and Nyala maize brand, has reached a settlement with the Competition Commission that brings an end to a long-running price-fixing case in which 17 companies were found to have set the prices of wheat flour and maize meal.
The food producer did not pay a fine as it was a whistle-blower, the Competition Tribunal said in a statement.
After Premier came forward followed by Tiger Brands, the Competition Commission, which acts like a prosecuting authority on competition matters, launched an investigation in March 2007 into price fixing of maize and flour.
It found that 17 companies agreed on prices and sharing the timing with each other when they would enact price increases, both in contravention of the Competition Act from between 1999 and 2007.
In terms of the settlement, Premier had agreed not to take part in illegal conduct, and has developed and implemented a competition law compliance programme in its business.
The finalisation of the case — in which some companies may have admitted guilt in settlements — is a legal step that would allow consumers to approach the high court for damages claims though it is unclear if this would take place.
“The Competition Act requires a finding by the [Competition] Tribunal that a firm has contravened the Competition Act, before a member of the public or any person affected by a cartel conduct can be entitled to institute a claim for civil or cartel damages in civil courts,” said commission spokesperson Siyabulela Makunga.
Initially, Tiger Brands, Pioneer Foods, Foodcorp, Pride Milling and Progress Milling were investigated.
Other companies that were later investigated included independent mills Bothaville Milling, Godrich Milling, TWK Milling, Keystone Milling, Westra Milling, Carolina Mills, Brenner Mills, Paramount Mills, NTK Milling, Kalel Mills and Blinkwater Mills.
All 17 have now reached settlements with most paying fines, the highest of which was Pioneer Foods’s R500m in 2010. The first company to settle was Keystone Milling, which paid a R6.7m fine in April 2010.
The tribunal, which acts like a court, and must sign off the final settlement between the accused company and then the Competition Commission can impose a fine of up to 10% of a firm’s annual turnover.
The fixing of maize prices, which hurt SA’s poorest consumers, began as a result of an investigation into the bread-fixing scandal, in which Tiger, Premier, Pioneer and various independent bakeries fixed bread prices between 1994 and 2006.
While the maize-fixing case appears to have taken a long time to complete, it required investigating 17 companies and 17 different settlement processes that took place between the commission and each company’s lawyers.
It would have taken far longer had any of the firms dragged the matter out in court.
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