Pioneer defends bread price
23 June 2009, 14:56
The decision to increase Sasko's bread price was based on operational costs and not the result of price fixing by a cartel, the Competition Tribunal heard on Tuesday.
Responding to a barrage of question from the Competition Commission's advocate David Unterhalter, Sasko's general manager Charl Goosen said he had made a "conscious" and "independent" decision to increase the bread price and was not aware of any price fixing at the time.
"In my mind there was no collusion," he told the hearing.
The hearing concerns a price-fixing complaint against Pioneer Foods - which owns Sasko - brought by the Competition Commission.
The commission alleged that Pioneer was part of a bread cartel involved in price fixing in 2006.
The cartel allegedly fixed the date of implementation of price increases and divided markets, in contravention of the Competition Act.
However Goosen maintained that the company had planned to increase its prices based on the increase in input costs in January or February 2007.
When it came to his attention that other companies planned to increase their prices on December 18, it was decided that Sasko would do the same.
He said he was not aware that Sasko's account manager Gerhard Lourens had attended two meetings earlier in December in which price fixing had been discussed with rivals in the industry in the Western Cape.
When he later discovered that an agreement had been made to fix the discounts for distributors, he said he investigated this and put a stop to it.
He however saw no need to investigate allegations of price fixing because he did "not suspect anything at all".
"I knew we were going to have an increase. At the time I did not know of the meetings."
However Unterhalter challenged that Goosen was consistently trying to reconstruct the timing of events and mislead the tribunal.
"Are you really asking the tribunal to believe that you were so naive, so extra-ordinarily lax in your managing responsibilities?"
Goosen responded: "In my mind there was no collusion."
The commission also received complaints against Tiger Brands and Foodcorp concerning the operation of a bread cartel.
Tiger Brands, however, settled the case with the commission and paid a penalty of R98-million. Foodcorp paid a penalty of R45-million.
Pioneer has consistently denied involvement in the operation of a bread cartel. - Sapa
Responding to a barrage of question from the Competition Commission's advocate David Unterhalter, Sasko's general manager Charl Goosen said he had made a "conscious" and "independent" decision to increase the bread price and was not aware of any price fixing at the time.
"In my mind there was no collusion," he told the hearing.
The hearing concerns a price-fixing complaint against Pioneer Foods - which owns Sasko - brought by the Competition Commission.
The commission alleged that Pioneer was part of a bread cartel involved in price fixing in 2006.
The cartel allegedly fixed the date of implementation of price increases and divided markets, in contravention of the Competition Act.
However Goosen maintained that the company had planned to increase its prices based on the increase in input costs in January or February 2007.
When it came to his attention that other companies planned to increase their prices on December 18, it was decided that Sasko would do the same.
He said he was not aware that Sasko's account manager Gerhard Lourens had attended two meetings earlier in December in which price fixing had been discussed with rivals in the industry in the Western Cape.
When he later discovered that an agreement had been made to fix the discounts for distributors, he said he investigated this and put a stop to it.
He however saw no need to investigate allegations of price fixing because he did "not suspect anything at all".
"I knew we were going to have an increase. At the time I did not know of the meetings."
However Unterhalter challenged that Goosen was consistently trying to reconstruct the timing of events and mislead the tribunal.
"Are you really asking the tribunal to believe that you were so naive, so extra-ordinarily lax in your managing responsibilities?"
Goosen responded: "In my mind there was no collusion."
The commission also received complaints against Tiger Brands and Foodcorp concerning the operation of a bread cartel.
Tiger Brands, however, settled the case with the commission and paid a penalty of R98-million. Foodcorp paid a penalty of R45-million.
Pioneer has consistently denied involvement in the operation of a bread cartel. - Sapa
Cape Town
