In November 2010, The Black Sash, The Children's Resources Centre, COSATU (Western Cape), the National Consumer Forum and five individual bread consumers (Tasneem Bassier, Brian Mphlele, Trevor Benjamin, Nomthandazo Mvana and Farreed Albertus) launched a class action seeking unprecedented damages against colluding companies Pioneer Foods, Tiger Consumer Brands and Premier Foods.
They had been found guilty by the Competition Tribunal in 2007, following whistle blowing from within the sector and testimonies by civil society.
Acting Judge Francois van Zyl refused to grant us a class certification order to represent consumers in the Western Cape. In May 2011 we appealed against his decision but again we were turned down. Subsequently we filed a petition with the Supreme Court.
Watch the trailer for the absorbing and very informative 24 minute documentary, “Crumbs” (AFDA Online Festival) which tells the David versus Goliath story of Imraahn Mukaddum, the bread reseller who blew the whistle on bread price fixing in South Africa. The documentary explores the turmoil Imraahn faces taking on the corporate food machine in the quest for social justice.
Collusion is severely detrimental to economic transformation, says chief
THE BLACK Business Council (BBC) has encouraged its members to proceed with legal action against companies found guilty of cartel activity or collusive behaviour. This opens the likelihood of construction firms, which were recently fined about R1.5 billion, facing legal action from downstream stakeholders. Procedurally, once a company enters a guilty plea, its customers are entitled to claim damages from it by asking the Competition Tribunal to issue a certificate for the high court, which could then be approached by the litigants.
On 2 August 2013, the North Gauteng High Court passed a judgment in respect of the Premier Foods’ section 65 application that sought an order that the Competition Tribunal not be allowed to issue the Bread Price Fixing litigants with a section 65 certificate on the basis that, amongst others, they received leniency. The court has dismissed Premier Foods’ application with costs. This now paves the way for us to request a section 65 certificate from the Tribunal and will ensure that, should our class action certification application be successful, summons can be issued against Premier alongside Pioneer and Tiger. Whilst this is another victory for the litigants, there is still a long battle ahead.
Read the full judgement (pdf 6.7MB)
Read the following article by Mongalo and Nyembezi published in Obiter, 2012 Vol 33-2 (copyright Obiter): The Court Refuses to Grant a Certification Order in the Bread-cartel Class Action Cases: A closer examination of the Western Cape Judgement.
In a landmark ruling, the panel of five judges in the Supreme Court gave clear guidelines as to the requirements for class action. This has contributed significantly to shaping the legal landscape in South Africa where the legislative framework for class action of this magnitude had not previously existed.
Our application was founded on the Section 27 right to food, which still remains the moral basis for our case. However, the court stated that class action is not confined to the Bill of Rights but extends to all constitutional rights, and as such Section 34 which enshrines the right of access to court would be the fundamental legal principle at stake. The court decided that in the Bread Price Fixing Case, the class of people that we represent would be unable to afford legal fees as individuals and as such, their right to court would be best served by a class action.
As litigants we will now prepare to take our case back to the Western Cape High Court, using the guidelines set by this judgement. We anticipate that we will be awarded the class certificate and will proceed to file damages against the bread cartel. Any damages awarded by a court would be of direct and indirect benefit to the consumers as a whole, particularly poor people.
- Competition Tribunal 'Decision and Order' against Pioneer Foods issued on 3 February 2010
- 'Founding Affidavit' issued in the case against Pioneer, Tiger and Premier
- 'Combined Summons' issued on Tiger Consumer Brands Limited on 26 November 2010
- 'Ruling' by Acting Judge Francios van Zyl denying us leave to appeal on 29 August 2011
- Petition filed with the Supreme Court of Appeal - 21 September 2011
- Annexure MCS1 - MCS2 to Supreme Court Petition - 21 September 2011
- Annexure MCS3 - MCS5 to Supreme Court Petition - 21 September 2011
- Annexure MCS9 - MCS12 to Supreme Court Petition - 21 September 2011
- Supreme Court of Appeal Order - 30 November 2011
- First Respondent's Heads of Argument - 15 August 2012
- Second Respondent's Heads of Argument - 16 August 2012
- Are the reasons given for refusing the certification order in the Bread Cartel Case legally defensible?