Supreme court of appeal provides guidance for class action against bread cartel - 30 November 2012

MEDIA STATEMENT

Friday, November 30, 2012

Issued by Black Sash, The Children's Resources Centre, COSATU (Western Cape) and the National Consumer Forum and five individual bread consumers (Tasneem Bassier, Brian Mphlele, Trevor Benjamin, Nomthandazo Mvana and Farreed Albertus)

We, the litigants in the Bread Price Fixing Case, welcome the judgement of the Bloemfontein Supreme Court of Appeal which overturned  the August 2011 decision of the Western Cape High Court to refuse us a class certificate.  That refusal delayed our efforts to represent bread consumers in the Western Cape in a lawsuit against colluding companies Pioneer Foods, Tiger Consumer Brands and Premier Foods which were found guilty of price-fixing by the Competition Tribunal in 2007, following whistle blowing from within the sector and testimonies by civil society.  

In a landmark ruling, the panel of five judges in the Supreme Court yesterday gave clear guidelines as to the requirements for class action.  This has contributed significantly to shaping the legal landscape in South Africa where the legislative framework for class action of this magnitude had not previously existed. 

Our application was founded on the Section 27 right to food, which still remains the moral basis for our case.  However, the court stated that class action is not confined to the Bill of Rights but extends to all constitutional rights, and as such Section 34 which enshrines the right of access to court would be the fundamental legal principle at stake.  The court decided that in the Bread Price Fixing Case, the class of people that we represent would be unable to afford legal fees as individuals and as such, their right to court would be best served by a class action.   

As litigants we will now prepare to take our case back to the Western Cape High Court, using the guidelines set by yesterday’s judgement.  We anticipate that we will be awarded the class certificate and will proceed to file damages against the bread cartel.  Any damages awarded by a court would be of direct and indirect benefit to the consumers as a whole, particularly poor people.

We appeal to all South Africans to express their solidarity with this case by coming forward to testify about the effects of high bread prices on the wellbeing of their households.  Contact This email address is being protected from spambots. You need JavaScript enabled to view it. or phone 072 66 33 739 

We must understand that it is the health and wellbeing of low earners and people who use state social grants largely to buy food for their family, children who benefit from school nutrition programmes, small-scale bread distributors and other consumers who continue to be harmed by the cartels.

We call on corporate South Africa to condemn the practice of collusion as immoral and detrimental to the fabric of our society, and specifically challenge Pioneer Foods, Tiger Consumer Brands and Premier Foods to lower the price of all basic foods in their stable in the wake of this judgement. 

In an environment where government is involved in the procurement of goods and services, and where the possibility for collusion and uncompetitive behaviour by companies applying for tenders is high, it is important that strong institutional checks and balances are implemented without delay.  As far back as 2008, civil society made submissions to parliament who tightened anti-competitive legislation.  However, we are disappointed that to this day, we do not enjoy the protection that Parliament envisaged. 

In this light, we demand that the President finally announce the implementation date of the much delayed Competition Amendment Act 1 of 2009.  This Act will enforce strict penalties on the Directors of companies found guilty of collusion.

ENDS

For interview requests, please contact:

Nkosikhulule Nyembezi

  • Black Sash Advocacy Programme Manager
  • Cell: 082-429 4719 
  • Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Marcus Solomon

  • Co-ordinator of Children’s Resources Centre
  • Cell: 072 468 2156 begin_of_the_skype_highlighting
  • Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Imraahn Mukaddam

  • Co-ordinator of the Western Cape Consumer Forum
  • Cell: 073-794 6092
  • Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Mike Louw

  • Cosatu Western Cape Regional Organiser
  • Cell: 082-339 5443
  • Email: This email address is being protected from spambots. You need JavaScript enabled to view it.