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Business: AfriForum Asks Penalise Dairy Companies That "milk" Consumer


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The civil rights initiative AfriForum has asked the Competition Commission in writing to apply the severest possible penalties to dairy companies, if these companies were to be found guilty of the exploitation of consumers and farmers by means of the violation of competition regulations.

According to Kallie Kriel, CEO of AfriForum, greedy dairy companies cannot be allowed (figuratively speaking) to "milk" South African consumers in order to ensure high profits. "Many consumers and farmers already battle to stay afloat in the current economic climate. The manipulation of the market by dairy companies burden punch-drunk consumers to an even greater degree," Kriel added.

AfriForum's request for severe penalties follows after an investigation by the Competition Commission found proof that several of the country's largest dairy companies collaborated by, for example, removing surplus milk from the market in order to prevent consumer prices from falling, by exchanging sensitive information about prices with each other in order to keep the prices paid to farmers as low as possible, and by dividing markets in the country amongst each other to limit competition.

The Cape dairy company Lancewood has already entered into an agreement with the Competition Commission this past Friday to pay a fine of R100 000 in exchange for cooperating with the commission in the prosecution of other dairy companies. These companies implicated in the alleged milk scandal include Clover, Parmalat, Nestlé SA, Ladismith Cheese, Woodlands and Milkwood.

The legal representatives of Clover, Milkwood and Lancewood are currently trying to evade prosecution based on technical points. In reaction, Kriel said that these companies should rather use this opportunity to try and prove their innocence, than to frustrate the process with technical details. "If they were to get off scot free on technical points without proving their innocence, the only option left to consumers would be to take a stand against greedy dairy companies by means of their buying patterns," Kriel stated.

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