Competition Commission Settles with Pioneer Foods

SOUTH AFRICA - The Competition Commission has reached a settlement with Pioneer Foods (Pty) Ltd (Pioneer Foods) in several cases under investigation by the Commission or before the Competition Tribunal. The cases relate to Pioneer Foods' activities in maize and wheat milling, baking, poultry and eggs.

8 November 2010

3 minute read

Africa

In broad terms, anti-competitive conduct in these important food sectors has impacted negatively on consumers and the ability of small and medium firms to enter and grow in these markets. The consent and settlement agreement is designed with these effects in mind.

Competition Commissioner, Shan Ramburuth said: "This agreement has gone beyond just a penalty and includes price adjustment for the benefit of consumers and a Fund to promote competition in the agro-processing industry. The Commission welcomes Pioneer's approach, as evidenced in this agreement, to resolving the matters and agreeing to undertakings aimed at a more competitive and dynamic economy in these crucial sectors."

The settlement agreement is subject to confirmation by the Tribunal.

The Minister of Economic Development and the Industrial Development Corporation will announce details on the Agro-processing Competitiveness Fund following the confirmation of this agreement. The IDC will administer the funds in compliance with agreed criteria and its corporate governance protocols.

The Competition Commission will continue with its current investigations and prosecutions against the remaining respondents in the various cases.

Regarding the investigation into the egg business, the report explains that, in May 2010 the Commission initiated an investigation for collusion and supply restraints in the markets for the sale of whole fresh eggs, sale of the day-old chicks to be reared as egg layers, sale of point-of-lay hens which are mature hens capable of laying eggs and sale of cull which are live chickens that are past their production cycle. The investigation is against Nulaid, Hy-line South Africa, Avichick, Eggbert, Top Lay, Fair Acres, Heidel Eggs, Lund Eggs, Evan Joubert t/a Waterglen Pluimvee, Parrdeberg Flinkwink, Outeniqua Eggs Succes Ventures t/a Golden Yolk ND Lay Well, Rosendal, Nantes Eggs, Eikenhof, Elkana, Windmeul Eggs, Morningside, Sunrise Eggs, Eden Rock and Cocorico.

Pioneer Foods applied for and was granted conditional leniency in respect of the role of its Nulaid division in conduct in contravention of section 4(1)(b) in the markets for the sale of whole, fresh eggs and the sale of day-old chicks to be reared as egg layers. The Commission's investigation into these allegations is still ongoing.