Competition Commission welcomes Premier Foods settlement in bread cartel case

12 May 2016

PBM

The Competition Commission says it welcomes the recently announced settlement agreement between Premier Foods and civil society organisations but the, including Black Sash, COSATU, the Children’s Resources Centre and the National Consumer Forum.

In a statement released today the Commission said this settlement brings to an end the longstanding civil claim brought by the victims of the bread cartel for damages suffered as a result of Premier Foods’ participation in the bread cartel.

But the case against other culprits in this matter;  Pioneer Foods, Tiger Brands and Foodcorp continues.

“The bread cartel was a lowest point in the history of collusion in South Africa. We congratulate and commend civil society organisations and Premier Foods for bringing finality to this ugly side of corporate behavior. We hope this settlement will pave way for the other respondents to do the right thing”, said Competition Commissioner, Tembinkosi Bonakele.

The statement explained that on 25 November 2015, the Commission lodged its application for leave to appeal to the Constitutional Court against the judgment of the Supreme Court of Appeal (SCA) delivered on 04 November 2015. In its judgment, the SCA upheld an appeal by Premier Foods against a decision by the North Gauteng High Court which held that the victims of the bread cartel may obtain a certificate issued by the Chairperson of the Competition Tribunal (Tribunal) in terms of section 65(6)(b) of the Competition Act to enable them to institute civil claims against Premier Foods for loss or damage suffered as a result of cartel conduct.  The Commission brought the application for leave to appeal to the Constitutional Court in order to safeguard the rights of the victims of the bread cartel to bring claims against Premier Foods.

Premier Foods was a leniency applicant in the matter in terms of the Commission’s Corporate Leniency Policy and admitted its participation in the bread cartel. However, it was not cited as a respondent in the complaint referral made to the Tribunal. The Tribunal found that Premier Foods together with Pioneer Foods (Pty) Ltd, Tiger Brands (Pty) Ltd and Foodcorp (Pty) Ltd had participated in the bread cartel.

The effect of the SCA’s judgement was that the victims of the bread cartel would not be able to institute civil claims for damages against Premier Foods, but will be able to institute civil claims against the other three firms which participated in the bread cartel.   The settlement between Premier Foods and civil society organisations resolves this dispute, and the Constitutional Court proceedings have now been withdrawn. However, civil claims against the remaining respondents are ongoing before the Western Cape High Court.

info@probonomatters.co.za

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