Bread producers to be sued - OUR TIMES 06 Jan 2012

CIVIL society groups which wanted bread companies to compensate consumers after they were found guilty of fixing the price of bread were granted leave to appeal an earlier ruling. Black Sash, the Children's Resources Centre, Cosatu (Western Cape) and the National Consumer Forum have joined forces in a class action against bread producers. The group said it was delighted the Supreme Court had granted them leave to appeal the earlier ruling in its lawsuit against Pioneer Foods, Tiger Consumer Brands and Premier Foods.

In 2009 the Competition Commission found the producers guilty of participating in a cartel that fixed the price of bread. Premier Foods was granted leniency for its cooperation. Tiger Brands, which cooperated fully with the Competition Commission, was fined "only" R95-million. But Pioneer Foods, who decided to challenge the commission and denied any wrong doing, eventually had to fork out a staggering R800-million in fines and related charges. But it seems their misery is set to continue.

Black Sash advocacy programme manager, Nkosikhulule Nyembezi, said the decision had strengthened the group's determination to fight for compensation. "The fines handed down by the competition authorities do not act as sufficient deterrents to big companies making massive profits," Nyembezi said. "Importantly, these administrative penalties do not compensate those who have actually suffered as a result of their corruption. "By acting collectively, we as consumers can hold these companies to account and make them pay for the damage and loss they have caused us."

Children's Resources Centre coordinator, Marcus Solomon, said the group would consult with community organisations affected by the case and file notice to appeal. "It was morally abhorrent that these bread producers profited illegally from the sale of a staple food. Their ongoing collusive activities robbed millions of poor and vulnerable families on a daily basis and over many years," Solomon said. "By doing so, they undermined our society's attempts to realise the Constitutional right to food and adequate nourishment, especially for children."

Cosatu Western Cape regional organiser, Mike Louw, said overcharging for bread over so many years had hit poor households. "These families are sometimes spending over half their income on food and often buy two or three loaves of bread a day as part of their efforts to sustain themselves on meagre incomes. "The accumulative damage of inflated bread prices is devastating, especially in a country battling to cope with such high levels of poverty and unemployment."