South Africa's Competition Commission battles Premier Foods bread cartel ruling

By Douglas Yu

- Last updated on GMT

South African business Premier Foods successfully appealed previous ruling
South African business Premier Foods successfully appealed previous ruling

Related tags: Cartel, Competition commission

South Africa’s Competition Commission is fighting a court ruling preventing victims of a bread pricing cartel suing Waterfall City-based bakery and confectionery business Premier Foods for its role in the scheme.

Premier Foods, Pioneer Foods (trading as Sasko and Duens Bakeries), Tiger Food Brands (trading as Albany Bakeries) and Foodcorp – whose combined brands hold up to a 60%  share of South Africa’s domestic bread market, according to the commission - colluded to fix bread prices from the late Nineties until 2006.

While Premier has been granted immunity from prosecution as the initial whistleblower in the cartel, North Gauteng High Court had ruled victims could obtain a certificate issued by the Competition Tribunal under the Competition Act to initiate civil claims against Premier for loss or damage caused by its participation in bread cartel. However, the Supreme Court of Appeal (SCA) last month upheld an appeal by Premier against the high court decision.

Leave to appeal 

The Competition Commission has now lodged an application for leave to appeal to the Constitutional Court against the SCA judgment, an action that follows a a similar application made by victims of the bread cartel filed with the Constitutional Court on 23 November 2015.

“Cartels are the most egregious violations of competition law,”​ said Commissioner Tembinkosi Bonakele. “It is the responsibility of the Commission to defend the rights of the victims of cartel conduct, such as the victims of the bread cartel to bring claims for civil damages if they wish to do so. For this reason, we have, respectfully, decided to appeal against the decision of the SCA.”

Bread was a staple food in South Africa relied upon by millions of consumers, added a spokesman for the Competition Commission. “Collusion is the most egregious form of anti-competitive behavior and has adverse effects on both consumers and the economy,” he said. “The most affected victim is always the consumer. In this case, these consumers were deprived of low prices.”

The commission said the cartel was exposed after Cape Town businessman Imraahn Mukaddam became suspicious when his bread supplier told him the price of bread would be going up by 30%, and that all the other suppliers would also be raising the price by the same amount.

Related topics: Premier Foods, Bread, Regulation & Safety

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