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Business & Technology
Dec 13 2012 7:44AM
 
Foodcorp kneads to cough up dough
SCAM: Foodcorp has been fined for collusive practices in the white maize and wheat milling industries. Pictures: Gallo Images
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Sibonelo Radebe

Consumables giant Foodcorp forked out R88.5m in a settlement with the Competition Commission after it was investigated for collusive practices in the white maize and wheat milling industries between 1999 and 2007.

Foodcorp has been caught by the competition authorities’ net before. It and other food producers were found guilty of price fixing in the bread market.

The case raised the ire of civil society groups, some of which have been gunning to pursue a class action from the bread case.

Foodcorp released a statement yesterday saying it would pay an administrative penalty of R88.5m. This represents an effective 10% of the turnover of the group’s milling division for the 2010 financial year.

It said the penalty would be paid in three equal tranches of R29,5m over the next three years.

The statement said: “Foodcorp contravened the Competition Commission Act between 1999 and 2007. The group was represented in meetings with competitors at which agreements on selling prices and the implementation dates of such prices were reached for both milled white maize and milled wheat products.”

The group said the senior employees who were involved in the practice had left the business.

“This matter relates to behaviour which ended in 2007 and which has caused great embarrassment to Foodcorp,” said group CEO Justin Williamson.

“We have learnt a very unpleasant lesson and will continue to implement extensive staff training to safeguard competitive and dynamic practices across the industry to the benefit of all consumers.”

As part of its ongoing employee development programmes, Foodcorp will continue to implement stringent compliance training to ensure that employees and managers, including sales and marketing staff, understand competition law and do not engage in any contraventions of the act.

“A sustainable future can only be achieved if companies follow responsible business practices. We incorporate this approach in everything we do and will continue to make every effort to contribute positively to the South African economy by making the right choices which are not solely driven by the financial bottom line,” Williamson said.

sibonelor@thenewage.co.za

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