Responding to a barrage of questions from the Competition Commission's advocate David Unterhalter, Sasko's general manager Charl Goosen said he had made a "conscious" and "independent" decision to increase the bread price and was not aware of any price fixing at the time.
"In my mind there was no collusion," he told the hearing. The hearing concerned a price-fixing complaint against Pioneer Foods (PFG) - which owns Sasko - brought by the Competition Commission.
The commission alleged that Pioneer was part of a bread cartel involved in price fixing in 2006.
The cartel allegedly fixed the date of implementation of price increases and divided markets, in contravention of the Competition Act.
However, Goosen maintained the company had planned to increase its prices based on the increase in input costs in January or February 2007. When it came to his attention that other companies planned to increase their prices on 18 December, it was decided Sasko would do the same.
He said he was not aware that Sasko's account manager Gerhard Lourens had attended two meetings earlier in December in which price fixing had been discussed with rivals in the industry in the Western Cape.
When he later discovered that an agreement had been made to fix the discounts for distributors, he said he investigated this and put a stop to it. He, however, saw no need to investigate allegations of price fixing because he did "not suspect anything at all".
"I knew we were going to have an increase. At the time I did not know of the meetings."
However, Unterhalter challenged that Goosen was trying to reconstruct the timing of events and mislead the tribunal.
"Are you really asking the tribunal to believe that you were so naive, so extraordinarily lax in your managing responsibilities?" Goosen responded: "In my mind there was no collusion."
Appearing as a witness for Pioneer, agricultural economist Barend Willemse, who was also a consultant for the food group, said there was no indication that the high price of bread was as a result of price fixing.
"From our point of view there is no evidence to say that there is collusion." He said over the period 2006 to 2007, data showed that input costs and operational costs had forced the bread price to increase and therefore collusion could not be singled out.
However under cross examination, Willemse conceded the study was a "work in progress". "So you can't draw any conclusions? A significant part of the explanation might arrive from collusion?" asked Unterhalter.
"At this point of time you are correct," said Willemse. The commission also received complaints against Tiger Brands and Foodcorp concerning the operation of a bread cartel.
Tiger Brands, however, settled the case with the commission and paid a penalty of R98 million. Foodcorp paid a penalty of R45 million. Pioneer had denied involvement in the operation of a bread cartel.
Source: Sapa
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