Pioneer Foods Unappealing
Pioneer Foods has been fined a whacking R195 millions, or around one third of headline earnings for last year, for participating in the bread cartel it ran with Tiger Brands, Premier Foods, and Foodcorp from 1999 to 2006. The general thinking is that the participants profited heftily out of the arrangement, in which they all set similar prices for the basic foodstuff, and that Pioneer should shut up and pay up. Pioneer, however, thinks that it may appeal the fine, and in fact has made no provision for payment anyway. The Competition Tribunal came down heavily on Pioneer in its judgement, saying that, harrumph, its defence had been mounted on a fundament of “manifest falsehoods”.
Comment: In the meantime, Pioneer’s brazen response to the saga has been rewarded by the punters, with the share price rising 58% in the last year.