PRICE FIXING: DA worries whistle-blower is being victimised

2007-11-15 00:00

The Democratic Alliance has welcomed the R99 million fine meted out by the Competition Commission to Tiger Consumer Brands for colluding with rivals Pioneer Foods and Premier Foods to fix the price of bread.

DA parliamentary leader Sandra Botha yesterday praised Cape Town bread distributor Imraahn Mukaddam for blowing the whistle on the cartel - and voiced concern that Mukaddam is reportedly being victimised for speaking out.

“In a country where 4,2 million people are estimated to live below the bread line, the price fixing of a staple food such as bread must be condemned in the strongest terms. This kind of uncompetitive behaviour pushes prices up and it is the consumer who - literally and figuratively - ends up paying for it,” Botha said in a statement yesterday.

Botha said while there have been calls from some quarters for price-fixing in the bread sector, it is “precisely this kind of knee-jerk response” that must be avoided.

“Price fixing leads to inefficiencies and is ultimately to the detriment of the consumer. One only has to look at what is happening in Zimbabwe at present to understand just how much damage such measures can do. The desire to further regulate the bread and other industries must also be resisted, as this is not the solution.”

The DA parliamentary leader said consideration needs to be given to making it possible (as it is in other countries) to hold senior management members of companies implicated in anti-competitive behaviour personally liable for their conduct.

“The need for an urgent review of the measures that will strengthen competition is underlined by the fact that this collusion between the three companies had already been in effect for the past 12 years. Situations like these occur because the government turns a blind eye to such practices, allowing companies like Telkom, Eskom and Spoornet to unilaterally hike prices in the absence of any proper competition,” she said.

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