Competition Commission and Pioneer

Competition Commission and Pioneer - 30 November 2010

OUTCOME OF COMPETITION TRIBUNAL HEARING on 30 November 2010

(Following is a guideline for journalists. The information can be used but please do not quote Nandi Mokoena or the Tribunal)

Tribunal confirms settlement between Commission and Pioneer

Today the Competition Tribunal confirmed the amended settlement agreement between Pioneer Foods and the Competition Commission. In terms of the confirmed agreement, Pioneer will now pay R500 million to the National Revenue Fund. Prior to the amendment Pioneer had agreed to pay R250 million to the National Revenue Fund as an administrative penalty and pay R250 million to the IDC to create an Agro-processing Competitiveness Fund. 

The confirmed agreement still retains Pioneers obligation to adjust its pricing of flour and bread such as to reduce its gross margin by R160 million. In addition Pioneer has agreed not only to maintain its current capital expenditure but to increase it by R150 million. At the hearing the Commission explained that the purpose of the latter was to ensure that Pioneer would not reduce its output on account of the penalties Pioneer has to pay. Amongst other commitments, Pioneer has also implemented a compliance programme aimed at ensuring that Pioneer employees adhere to competition laws.  

The agreement settles all the cases which the Commission was investigating against Pioneer except those for which Pioneer has requested leniency from the Commission. The Commissions leniency programme gives firms an opportunity to confess their role in contravening the Competition Act, in exchange for immunity from prosecution.

Issued By: 

Nandi Mokoena                                                    

PR Consultant: Competition Tribunal                                          

Cell: +27 (0) 82 399 1328                                            

E-mail: NandisileM@live.co.za

On Behalf Of:

Lerato Motaung                                                   

Registrar: Competition Tribunal                                        

Tel: (012) 394 3355                                             

Cell: +27 (0) 82 556 3221                                              

E-Mail: LeratoM@comptrib.co.za