Pioneer Foods has reduced the price of bread by around 30 cents a loaf as part of its fine for being part of a price-fixing cartel, the Competition Commission said on Tuesday.

“Pioneer Foods (Pty) Ltd has informed the Competition Commission that it has begun to implement price reductions on bread and flour as per the settlement agreement reached on 30 November 2010,” the commission said in a statement.

In February this year the Competition Tribunal imposed a fine on Pioneer for its participation in a cartel found to have colluded in fixing the price of bread.

The price of a standard white and brown loaf of bread was reduced by an average of 30 cents on December 3.

“This price reduction is in addition to any other promotional discount to retailers,” the commission said.

The price of flour was reduced by an average of R350 per ton from December 10.

“Pioneer's pricing commitment in terms of the settlement agreement amounts to a reduction of R160 million in its gross profit when benchmarked against a similar period in the previous year,” the commission said.

Pioneer would submit progress reports to the Competition Commission every second month and PricewaterhouseCoopers would review the price reduction commitment.

The commission said it had spoken to large supermarket chains about passing on the price cuts to consumers.

“The commission will also independently monitor the retail and wholesale prices of flour and bread products.”

In terms of the settlement reached between the Competition Commission and Pioneer, the company would pay a total of R855 million in settlements.

This included R500 million into the National Revenue Fund and the R160 million reduction in profit from the sales of bread and flour. The company had already paid a fine of R195.7 million for bread price-fixing. - Sapa