INNSCOR Africa (Innscor) has blasted its competitors and accused CFI Holdings of instigating an investigation into alleged breach of competition rules by the diversified conglomerate.
Report by Taurai Mangudhla
Innscor CEO John Koumides this week told an Imara Zimbabwe Conference in Harare the accusations came from competitors who had an axe to grind given the success of his company.
“One of the main accusers is CFI’s Victoria Foods, but we have no case to answer,” he said, adding Innscor had cleared all the concerns with CTC three weeks earlier.
“One of them is a customer who failed to settle an account (with National Foods) at dollarisation.
Some of this information comes from people who have an axe to grind because of our efficiencies. We are competitive and we have managed to reduce prices significantly especially for our fast food outlets. We have reduced revenue per customer but we get more customers.”
Last month, businessdigest reported that Innscor was being accused of failing to give notice of its intention to acquire a majority stake in National Foods, resulting in CTC opening an enquiry into the conduct of the conglomerate.
During a stakeholders meeting, the commisssion noted that Innscor had gradually increased its shareholding in National Foods over a sustained period since 2003, but failed to notify the relevant authorities, in particular CTC, of the process when its shareholding grew to an effective controlling interest.
However, Koumides argued his company had been made to understand there was no need to get clearance for the gradual share increase on grounds they already accounted for a majority stake.
The accusations levelled against Victoria Foods come after the company’s marketing director Joel Katsande said Innscor should have declared upfront its intentions to acquire National Foods and given peers the opportunity to give representation as is the norm everywhere. He was speaking at the Competition and Tariff Commission (CTC) public hearing to determine whether Innscor had broken competition rules.
Victoria Foods officials said the acquisition of Natfoods had created dominance and gave the group power to influence the pricing structure as there could be unfair internal price transfer between National Foods and Innscor bakeries.
In its half year results for the period to December 2012, Innscor said National Foods’ production went up 24% in the prior comparative period to 241,000 metric tonnes. The unit was profitable due to improved margins and disposal of non-core assets. The group profits for the period slid 11%, on account of what the company said was a depressed trading environment.
The group achieved gross sales of US$338 million in the first six months of trading, yielding an operating income of US$34 million, down from US$38 million in the previous comparative period.