Tribunal confirms settlement of 13th maize company involved in cartel
The Tribunal has confirmed a settlement agreement between the Commission and Paramount Mills (Pty) Ltd (Paramount), in which the milling company admits to cartel involvement and agrees to pay an administrative penalty (a fine) of R 1 320 819.00.
In terms of the settlement, the maize company admits that it agreed with its competitors to fix prices for milled white maize products and fix trading conditions from 1999-2006. According to the settlement papers, representatives of Paramount attended meetings and engaged in telephone conversations with competitors and agreed to:
- Directly fix the selling price of milled white maize products;
- Directly fix dates on which such agreed price increases were to be implemented; and
- Exchange information about their pricing structures.
Paramount is the 13th maize company, in this case, that has entered into an agreement with the Commission. The other companies are listed in the table below, which also includes the dates on which the respective settlements were made orders of the Tribunal:
| | Settlement agreement | Date of Tribunal order | Administrative penalty |
| 1 | Keystone Milling (Pty) Ltd | April 2010 | R6 730 349.00 |
| 2 | Pioneer Foods (Pty) Ltd | November 2010 | R500 000.00 |
| 3 | Carolina Rollermeule (Pty) Ltd | April 2011 | R4 417 546.00 |
| 4 | Foodcorp (Pty) Ltd | December 2012 | R88 500 000.00 |
| 5 | Blinkwater Mills (Pty) Ltd | March 2017 | R10 112 504.20 |
| 6 | Bothaville Milling (Pty) Ltd | June 2017 | R10 112 504.20 |
| 7 | Brenner Mills (Pty) Ltd | August 2017 | R12 000 872.00 |
| 8 | Pride Milling (Pty) Ltd | September 2017 | R10 624 959.60 |
| 9 | Godrich Flour Mills (Pty) Ltd | November 2017 | R4 354 476.00 |
| 10 | Progress Milling (Pty) Ltd | June 2018 | R2 120 000.00 |
| 11 | TWK Milling (Pty) Ltd | November 2018 | R1 845 863.75 |
| 12 | NTK Limpopo Agri (Pty) Ltd | February 2019 | R1 364 360.00 |
Paramount’s penalty (fine)
Paramount has agreed to pay the abovementioned administrative penalty. According to the settlement agreement, it must pay half of the penalty within ten days. The balance must be paid in twelve equal instalments, with the last instalment being paid on or before 31 January next year.
In accordance with the Competition Act, the penalty will be paid over by the Commission to the National Revenue Fund. All penalties are paid over to the National Revenue Fund. This is a fund into which all money received by the national government must be paid.
Future cooperation
Paramount has also agreed to fully cooperate with the Commission in the prosecution of the remaining respondents (accused companies) in this matter. There are two remaining respondents in this matter.
Competition law compliance programme
Paramount also agrees to develop, implement and monitor a competition law compliance programme as part of its corporate governance policy.
Investigation and case background
In March 2007, the Commission started investigating whether Tiger Brands, Pioneer Foods, Foodcorp, Pride Milling and Progress Milling violated competition laws.
The investigation started after the Commission received a corporate leniency application from Premier, which was corroborated by a further corporate leniency application by Tiger Brands that same year. In terms of the Commission’s Corporate Leniency Policy, a cartel member can disclose information on a cartel in return for immunity from prosecution and fines.
Other maize milling companies were later also investigated. These included Bothaville Milling, Godrich Milling, TWK Milling, Keystone Milling, Westra Milling, Carolina Mills, Brenner Mills, Paramount Mills, NTK Milling, Kalel Mills and Blinkwater Mills.
The Commission alleges that during 1999-2007, the companies attended meetings and had telephone discussions during which they agreed to fix the price of milled wheat products and create uniform price lists for wholesalers, retailers and general trade customers. The Commission also alleges that the companies agreed on the timing of the price increases and that the agreements were used to secure coordination at both regional and national level. The Commission concluded that this conduct amounted to price fixing and fixing of trading conditions in contravention of the Competition Act.
Issued by:
Gillian de Gouveia
Communications Officer
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
Email: GillianD@comptrib.co.za
Twitter: @comptrib
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