The Competition Commission Fresh Produce Market Inquiry Report has recommended an overhaul of the local fresh produce market, to ensure that the previously disadvantaged farmers and market agents participate in the market.
The inquiry was launched in March 2023 to probe anti-competitiveness practices in the fresh produce market, following complaints by some small emerging farmers.
The inquiry examined five key fruits, apples, oranges, soft citrus, bananas, pears, and table grapes, and six staple vegetables, potatoes, onions, carrots, cabbage, tomatoes, and spinach.
The report was today handed over to Trade and Industry Minister Parks Tau in Pretoria.
“This inquiry’s final report is more than a document, it provides rich insights into the domestic fresh produce market and more importantly, a path into economic inclusion.
It reflects the need to address entrenched challenges and creating a market that works for all, from the smallest farmer to the largest farmer, to the retailer and even the consumer,” said Deputy Commissioner Hardin Ratshisusu.
In addition, the report noted that despite the sector valued at some R53 billion annually (excluding informal sales channels and exports) most players are still excluded.
“However, the share of participation by historically disadvantaged farmers and market agents remains low.
This underrepresentation is a stark reminder of the sector’s historical inequities and the urgent need for meaningful participation in the economy and transformation in South Africa.
Localised competition, particularly from SMMEs and HDP (historically disadvantaged persons) independent retailers with diverse models, including through greater procurement from National Fresh Produce Markets (NFPM), is required for more dynamic competition in fresh produce retail.
This, in turn, requires efficiently functioning NFPMs and effective policies to support alternative retail models,” said Ratshisusu.
The report also called for urgent intervention, to address the inflated prices for fruits and vegetables.
“Supermarket sales and pricing revealed instances of high mark-ups of total revenue over what suppliers are paid for some of the selected products in the periods analysed.
However, net margins, after the high costs of supermarket chain operations are accounted for, are slim.
This indicates concerns in the value chain, where high rents may be extracted at the supermarket level of the value chain.
The implication is that under the current models of modern food retailing, supermarket chains are not efficiently transmitting prices obtained from farmers to consumers for these produce categories,” remarked Ratshisusu.
The report has recommended 31 actionable remedies to remedy the anti-competitiveness in the sector.
“These measures, which include recommendations for policy reform, market restructuring, and targeted support for small-scale, emerging and historically disadvantaged farmers, are intended to promote competition, lower barriers to entry, and create a more inclusive and competitive fresh produce value chain,” said Ratshisusu.
Moreover, the report instructed retailers to clearly display prices of fruits and vegetables, within 12 months.
“Retailers, namely Shoprite Checkers, Pick ‘n Pay, Woolworths, the SPAR Group, Food Lover’s Market and Massmart, must display pricing on a per 100-gram basis.
The weight price should be displayed in such a manner that a consumer can easily identify,” concluded the Deputy Commissioner.