More food companies charged with price fixing

Companies illegally fixing the price of bread

The Competition Commission has formally charged two more companies with collusion and illegally fixing the price of bread. They are Pioneer Foods and Foodcorp.

Pioneer Foods - which was recently listed on the JSE - and Foodcorp - which is owned by well known black empowerment company, Pamodzi - plan to fight the charges. Shares in Pioneer Foods tumbled following the news.

Last year, Tiger Brands admitted guilt and was fined almost R100 million. If Pioneer Foods is found guilty by a tribunal, the Competition Commission will impose a fine of 10% of last year's turnover. That amounts to about R110 million. Foodcorp, on the other hand, could cough up as much as R135 million.

Last year Premier Foods confessed to colluding with Tiger Brands, Pioneer Foods and Foodcorp to fixing the price of bread illegally. As a result, the company was granted immunity from prosecution. But, Pioneer Foods and Foodcorp deny any wrong doing despite evidence Premier Foods and Tiger Brands presented to the Competition Commission.

The two companies have refused to comment, saying they will respond in writing to the Competition Commission in the coming weeks. Meanwhile, the Commission says it is making good progress in its investigation of collusion and price fixing in the broader food industry.