WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2008-02-03 Time: 00:00:00 Posted By: Jan
[So what now? They’ve been warning for years that the dairy farmers are in trouble and many went bankrupt. Our milk is supplied by only a few dairy farmers. So what now? Will they too be driven into bankruptcy? Jan]
Faced with evidence of collusion by seven dairies to raise milk prices, the Competition Commission is calling for “severe” penalties as the best deterrent.
Farmers are asking the commission to save the dairy industry from collapse by imposing a suspended sentence instead of the estimated R1-billion fine facing dairies.
However, commissioner Shan Ramburuth said on Thursday: “Our experience tells us that the penalty must be sufficiently severe to disincentives collusive behaviour.”
The commission has been investigating the companies since 2005, and prosecution procedures are due to begin next week.
“The Competition Tribunal took the trouble during the hearing on the bread cartel to point out that we could calculate penalties on the turnover of the entire company rather than limiting it to that part of the business that was involved in the collusion,” Ramburuth said.
At the end of a three-year investigation into milk price-fixing by Clover, Parmalat, Nestle, Ladismith Cheese, Woodlands, Lancewood and Milkwood dairies, the commission would ask the competition tribunal to fine dairies 10 percent of their annual turnover, said Ramburuth.
Mposa (Milk Producers Organisation SA), which represents dairy farmers, estimates that the total fine will be about R1-billion.
It says the dairies’ actual profit margins bear no resemblance to their annual turnover and some of them could be forced to close if fined heavily.
Their closure would in turn hit farmers, who depend on the dairies to buy their milk.
Another fear is that dairies will try to compensate for the fines by paying farmers less for milk, which would force many out of the industry.
Ramburuth said on Thursday: “Mposa has not formally made this submission to us and perhaps the owners and shareholders of dairies would like to respond publicly on whether they have threatened farmers with this.
“In any event, the dairies have elected to contest this case rather than applying for corporate leniency or attempting to settle the matter, and they will have to take responsibility for the outcome.”
The commission has found evidence of activities such as price-fixing through exchanging information about prices; exchanging milk with competitors; and entering exclusive supply agreements with farmers.
An industry spokesman, who asked not to be named, said milk exchanges could happen when a dairy had a surplus. Instead of lowering the milk price to dispose of extra supplies, the dairy gave the extra milk to a rival.
Exclusive supply agreements with farmers usually amounted to a dairy asking a farmer to sell to it solely under threat of not buying any of the farmer’s milk.
Ramburuth said there was also evidence of markets being manipulated through arrangements that limited volumes of milk to keep the price from falling when large quantities were available.
Clover had been granted conditional immunity in re-turn for evidence of fixing the selling price by controlling volumes, but that immunity did not extend to other areas of price-fixing, said Ramburuth.
Although the commission was also investigating a complaint from Mposa that supermarkets were using their buying power to buy milk cheaply from the dairies and add a high margin, Ramburuth said he could not comment yet.
Next week the tribunal would call a pre-hearing conference, where it would be decided how the actual hearing would be managed, he said.