Pioneer reduces prices as part of penalty

South Africa’s Pioneer Food Group Ltd. said it has started reducing the price of bread and wheat flour as part of a record penalty for anti- competitive behavior at some of its units, reported Bloomberg.

“The price of standard white and brown loaves of bread was reduced by an average of 30 cents on December 3,” Pioneer Managing Director Andre Hanekom said in a statement e-mailed by the Competition Commission yesterday. The price of flour was cut by an average of 350 rand ($51) a metric ton from Dec. 10, it said.

Pioneer, which produces Weet-Bix cereal and Heinz Tomato Ketchup, earlier this year settled antitrust penalties worth 1.05 billion rand for price-fixing in flour and corn processing, and collusion over flour, bread and corn prices.

The latest price cuts are aimed at reducing earnings from Pioneer’s bread and bakery division by 160 million rand, part of the total 660 million rand fine it agreed with the Competition Commission, Hanekom said by mobile phone. “Further price reductions will depend on volumes,” he said.

Pioneer has also started paying the 500 million rand cash portion of the fine, having last week paid 67 million rand, Hanekom said. “We will pay 217 million rand next year and another 217 million the following year,” he said.