Pioneer settlement lights the way

Pioneer Food’s settlement with the Competition Commission includes a payment of R250 million to the Industrial Development Corporation to set up an Agro-Processing Competitiveness Fund.

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The fund, which is in addition to the R250 million fine Pioneer must pay to the National Revenue Fund, will provide finance on favourable terms to small and medium enterprises. It also aims to promote competitiveness, employment and growth in food value chains.

Grain SA chairperson Neels Ferreira was impressed by the inclusion of the competitiveness fund in the settlement. “That’s the first time in history there’s been such a ruling. We believe it’s the way to go,” he said.

“The question is, why wasn’t there such a ruling in the Sasol case? We have a shortage of agricultural research in South Africa and money like that could’ve made a positive contribution to research.”

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Ferreira said it was unlikely that the fine Sasol paid for anti-competitive behaviour in the fertiliser industry would be used to set up a research fund, but he hoped it would be a possibility in future agricultural cases before the Commission. “We’ll negotiate with government for support in this regard,” he said.

Sasol paid a R250 million fine earlier this year for anti-competitive practices and agreed to restructuring, but farmers have yet to be reimbursed for the higher prices they paid as a result of price manipulation between 1998 and 2004. Sasol has agreed to enter into a negotiated settlement with farmers represented by the Transvaal Agricultural Union (TAU) to claw back some of the costs. 

TAU recently sent Sasol a report from its forensic auditor and legal team, which detailed farmers’ losses. The union’s general manager Bennie van Zyl said he hoped to sit down with Sasol soon to reach a settlement that would negate the need to go to court.