Designing Appropriate Remedies for Competition Law Enforcement: The Pioneer Foods Settlement Agreement

Posted by Social Science Research Network

Designing Appropriate Remedies for Competition Law Enforcement: The Pioneer Foods Settlement Agreement

Tembinkosi Bonakele (South African Competition Commission) & Liberty Mncube (University of Cape Town)

Abstract:     This paper critically discusses the use of remedies in pursuing distributive justice through the restoration of competition, deterrence and disgorgement. The paper addresses more specifically the design and objectives of the Pioneer Foods settlement agreement. The remedies that were concluded with Pioneer Foods constitute a major measure of ‘success’ in the enforcement of competition law in developing countries. They included, among others, an administrative fine part of which by agreement was set aside for the creation of an Agro-processing Competitiveness Fund aimed at lowering the barriers to entry as well as a commitment to reduce prices on the sale of flour and bread over an agreed period designed to stimulate rivalry while at the same time enabling smaller non-vertically integrated participants to compete in bread. The paper also demonstrates the impact of the discount remedy, using a comparative approach.