Food activists say their fight to have the large corporations involved in a bread cartel brought to book is not over yet. A group of civil society organizations and the Competition Commission representing the alleged victims of Premier foods bread pricing, which was part of a bread cartel in 2006, had to withdraw their appeal from the Constitutional Court (ConCourt) after Premier Foods agreed to settle.
The ConCourt was scheduled to hear the matter on Tuesday, but the matter was withdrawn when Premier Foods came forward and accepted liability.
The organizations’ approached the ConCourt in a bid to challenge the Supreme Court ruling that effectively let Premier Foods, which makes Blue Ribbon bread and owns the Snowflake brand, off the hook for its role in the 2006 bread cartel. The Court set aside a declaration that allowed lawsuits to be filed against the company.
Imraahn Mukkadam from the South African Food Sovereignty Campaign said it was not a victory, but rather a compromise, since the case has been dragging for 10 years.
“This was not an offer that we could not refuse, it was rather an offer to make this issue go away,” Mukkadam said.
He said that the money will be placed into a trust account that will be directed toward poverty alleviation, specifically for the needs of children.
“We want to start getting these companies that are found guilty of these kinds of actions to start making reparations to help the most vulnerable.”
Mukkadam said that despite the compromise, the cartel continues to be profiteers of basic food goods.
While Premier foods were not held liable for price fixing, other companies involved in the cartel were heavily fined; Pioneer Foods was fined R195.7 million, Tiger Brands and Foodcorp negotiated fines of more than R98 Million and R45 Million respectively.
“We would have loved this issue to have gone to the ConCourt, so that we could get finality on Premier Foods, because they were caught with leniency, but got off scott-free, while the other companies were fined,” he continued.
He said that Premier Foods admitted to wrong doing in the Competition Commission case and were mentioned as one of the parties that are guilty of price fixing at the Competition Tribunal.
“They already damaged their reputation and have already admitted in their papers that were submitted to the Competition Tribunal in 2007. The wrongdoing is clear, but it’s a case of them wanting this thing to go-away,” Mukkadam said.
Mukkadam further noted that in 2015, the price of fuel and the international price of wheat dropped dramatically, to the extent that the minister of trade and industry was forced to increase the import tariff.
He said that while the wheat price dropped, bread companies continued to inflate the price of bread to approximately 22 per cent, therefore, indicating that companies are profit driven.
“We have South Africans going hungry. Therefore, basic food stuff can’t be profit driven to the extent that the poor are subsidising the rich.”
He explained that in light of profits earned by companies such as Pioneer Foods, whose profits were R26 billion in 2014/2015, price fixing is unacceptable.
The Food Sovereignty Campaign is launching a national bread march on Friday May 13 in Johannesburg, which will be followed by bread marches throughout the country.
“As civil society we are not going to make this issue go away. We will highlight as much as possible that there is still too much profit made off bread. As a basic need we believe that it shouldn’t be a profit centre for these big food monopolies. We can only make the change if we make our voices heard,” Mukkadam said.