Foodcorp will part with R88.5million in a settlement reached with the Competition Commission relating to a case of collusive practices in the white maize and wheat milling industries between 1999 and 2007.
In a statement released today Foodcorp said it will pay an administrative penalty of R88,5 million, representing an effective 10% of the turnover of its milling division for the 2010 financial year. The penalty will be paid in three equal tranches of R29,5 million respectively over the next three years.
Foodcorp contravened the Competition Commission Act between 1999 and 2007 in that it 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 as well as milled wheat products. The group said the senior employees who were involved in the matter are no longer with the business.
Foodcorp’s share of the retail market is 3.4% for white maize and 0.1% for flour, as it primarily supplies flour to the industrial sector and not the trade directly.
Foodcorp CEO Justin Williamson said “This matter relates to behaviour which ended in 2007 and which has caused great embarrassment to Foodcorp. 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.”
“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,” said Williamson.