The Bread Cartel

How the Bread Cartel Was Broken

The workings of the bread business pre cartel. The effect of the cartel on consumers and on independent bread distributors. The blowing of the whistle and the investigation by the Competition Commission culminating in its awards in which no damages were included. The entitlement to damages for collusive interference in contractual relations and possible human rights infringements.

Class Actions Class actions were unknown in the common law of SA prior to 1994; joint actions and public interest litigation were permissible. With the adoption of constitutional democracy and a Bill of Rights, class actions for human rights infringements were introduced. In 1998 the Law Reform Commission suggested legislation in respect of class actions and prepared a draft law that was never adopted. The absence of a procedure for class actions dampened attempts at class actions prior to the bread case.

The Supremacy of the Constitution and the Effect of the Bill of Rights on Class Actions

As noted already, class actions for human rights violations are contemplated in the Bill of Rights. Other legislation also recognises this procedure, not necessarily in the context of human rights. A supreme constitution requires that all laws and conduct be consistent with the values and principles of that constitution. Fitting the bread cartel ’ s activities into the “ human rights infringement ” mould was no easy task. The consumers and the distributors have different claims.

The Breakthrough in the Supreme Court of Appeal in the Consumers’ Case

In the Western Cape court the claims of the distributors and consumers were dismissed. The breakthrough came in the SCA when the consumers were given the opportunity of starting afresh with a general class action according to a procedure stipulated by the court. This is much more than a mere “human rights infringement” case. The distributors lost in the SCA but appealed further to the CC.

The Distributors Consolidation of the Breakthrough in the Concourt Appeal

The distributors were regarded as beneficiaries not victims of the cartel by the SCA. The Concourt accepted that they were victims and allowed their appeal. It confirmed the procedure for general class actions but seemed to suggested that the procedure may not be required in human rights infringements based cases. This conflates public interest litigation and class actions. The legal landscape in SA will no longer be the same as it was before the whistle-blowers in the bread cartel case stood up against corporate greed and collusion.