Giving capitalism a bad name


Analysts are warning that the many fines Pioneer Foods has attracted for ripping off consumers – including you and me – could cost jobs.

The bread and flour price cheats have already coughed up or set aside R350 million in administrative penalties for anti-competitive practices, and is now under threat of an even heftier censure, Business Report says. The Competition Commission is claiming the fines imposed by Competition Tribunal for contravening the Competition Act are not enough and is appealing to increase the fines to R1.6 billion.

Wendy Mkwananzi, the chief counsel for the Competition Commission, says the present fines are not enough of a deterrent to ensure the practices won’t recur. Considering the amount of organised rigging, market allocation and crooking the Competition Commission has uncovered in recent years, I think she is right.

Analysts say a fine of that magnitude will blow the company “out of the water”, Business Report says. They say the commission has to be careful, considering that the company employs a significant number of people – about 12 000. “If Pioneer has to pay that fine, it will be dealt a heavy blow and in the current climes of unemployment, this is not favourable,” Absa Investments analyst Chris Gilmour warned.

This is infuriating. First the public gets over-charged and then when the company is punished, up comes the job losses defence. Ordinary people pay twice for this type of corporate greed. The bread and wheat cartels as well as the rigged concrete and pharmaceutical markets are the local manifestations of the get-rich-by-any-means morality that brought the world the global banking debacle of 2008. Limited liability banks, hedge funds and governments, such as that of Greece, took unlimited risks with dodgy financial intruments. While it lasted executives delighted themselves with vast salaries and even greater bonusses,telling themselves and us it was richly deserved. When it all went belly-up, it suddenly became Joe Taxpayer’s problem.

Heads, they win, tails, we lose.