inlsa

Photo: Simphiwe Mbokazi

South Africa's second largest

grocer, Pick n Pay, on Friday said that following Pioneer Food Group's (PFG)

statement that it had started reducing the price of bread and flour, it had

started passing this saving on to consumers.

Earlier this week, The Competition Commission announced that Pioneer

informed it of having started with the implementation of price reductions on

bread and flour as per the settlement agreement reached on November 30 2010.

“The price of standard white and brown loaves of bread was reduced by an

average of 30c on December 3 2010, this price reduction is in addition to

any other promotional discount to retailers. The price of flour was reduced

by an average of 350 rand per ton as from December 10,” the antirust body

said in a statement.

Pick n Pay's spokesman, Tamra Veley said it had always been Pick n Pay's

practice to pass savings on to South African consumers as far and as quickly

as possible and Pioneer Foods' bread and flour price reduction gives the

group the opportunity to alleviate some pressure off its consumers.

“Pick n Pay dropped its Sasko brown and white bread prices on December 3

by 25 cents and 30 cents respectively. These prices will be valid until the

end of January,” Veley said.

Pick n Pay dropped the selling prices of bread in its bakery division on

November 22 2010.

Said Veley: “The price of white 600g bread has been dropped to 4.89

rand, while the price of white 700g bread was reduced to 5.59 rand. The

price of brown 600g bread was dropped to 3.89 rand while the price of brown

700g bread was dropped to 4.89 rand.”

Pioneer's announcement is in compliance with the Competition Tribunal's

order following Pioneer's involvement in the bread price-fixing matter.

The group's pricing commitment in terms of the settlement agreement

amounts to a reduction of 160 million rand in its gross profit when

benchmarked against a similar period in the previous year.

Pioneer will submit progress reports to the Commission every second

month, and PriceWaterhouseCoopers will review and confirm the attainment of

the price reduction commitment. - I-Net Bridge