Milling firm ‘bullied’ into maize price-fixing
GODRICH Flour Mills, a small family-owned business operating from Bronkhorstspruit, was “bullied” by some of its larger competitors to attend meetings at which the the price of milled wheat and maize products was fixed, the firm’s legal representative Terry Mahon told the Competition Tribunal yesterday.
Mahon said it was “a sad story” in the sense Godrich were reluctant participants in the meetings.
“They participated in the meetings but decided they were not going to implement anything that was agreed… and never did.”
He added Godrich never approached the commission for help against some of its larger competitors because “in those days” they were unaware of things like the Competition Tribunal.
He was speaking at a tribunal hearing to consider the confirmation of a settlement agreement reached with the commission in terms of which Godrich has agreed to pay a fine of R4 354 467 for taking part in a cartel that colluded with other maize-milling firms to fix the price of white maize and the dates on which the new pricing would be implemented.
Settlement
The tribunal yesterday confirmed the settlement agreement. The agreement and hearing follows the commission in March 2007 initiating a complaint against Tiger Brands, Pioneer Foods, Foodcorp, Pride Milling and Progress Milling.
The initiation was subsequently amended to include other players in the milling industry such as Blinkwater Mills and Godrich.
The commission’s investigation revealed that a number of firms involved in the market for white milled maize participated in meetings between 1999 and 2007 at which the fixing of selling prices and trading conditions for maize and wheat were discussed and agreed on.
Although Gordich did not implement any of the decisions taken at the meetings, it acknowledged its failure to disassociate itself from decisions taken at the meetings was a contravention of the Competition Act.
The case is still continuing against Pioneer Foods, Foodcorp, Progress Mills, Westra Milling, TWK Milling, NTK Milling, Isizwe Mills and Paramount Millis. Tiger brands and Premier Foods were the leniency applicants in the case.
Thokozile Lekhuleni, appearing for the Competition Commission, said Godrich’s penalty represented 5 percent of the firm’s affected turnover for its 2007 financial year.