by Carien Kruger
The Competition Commission revealed the specific fruits and vegetables it will look at in its investigation of competition in the fresh produce value chain.
The chosen products include apples, citrus, bananas, pears, table grapes, potatoes, onions, carrots, cabbage, tomatoes and spinach.
At a media conference on 23 March where the investigation was introduced, Hardin Ratshisusu, Deputy Commissioner and Chairperson of the investigation panel, said that the industry’s product range was too big for everything to be investigated. The products that were chosen represent at least 70% of production and sales.
The investigation will officially begin on 31 March and needs to be completed within 18 months according to law.
Doris Tshepe, the Commissioner, said that the Commission receives various complaints about uncompetitive behaviour in the value chain for fresh produce. In the Commission’s report on levels of concentration in the economy released at the end of 2021, it was also found that agriculture is characterised by high levels of concentration.
The Commission has been undertaking food price studies since 2020 and she says that the findings indicate include upsetting levels of price increases and volatility of prices in the fresh produce sector. The effect of these increases is disproportionately large under poor and low income consumers.
Hardin said that the investigation will be divided into three themes, namely the efficiency of the value chain – which includes the fresh produce markets, the role of market agents and direct contracts between traders and farmers; market dynamics of production means and how it affects farmers; and barriers to entry for small-scale farmers and previously disadvantaged producers.
For the latter theme, access to financing and water will be looked at, among other things.
The technical task team, led by Ruan Maré from the Commission, will start their work with the collection of information. Any member of the public can provide information. Guidelines for participation and a document that lays out the issues to be investigated have been published on the Commission’s webpage.
Furthermore, the task team has identified specific stakeholders, including companies in the industry, who will be approached with questions regarding especially costs and prices.
The Commission plans to hold public hearings in the various provinces where the fresh produce involved in the investigation is produced.
Encouraged participation
Doris has called for public participation. “These investigations work better if there is participation by all stakeholders.”
According to Hardin, stakeholders are first approached with a request to supply information willingly, but under the Competition Act (Act 89 of 1998) the Commission can sue organisations to supply information and appear before it if it does not receive cooperation.
After the investigation is complete, the Commission must make recommendations regarding the relevant corrective action to improve competition and access for new entrants based on their findings. Companies are obligated by law to implement these recommendations. “Participation by stakeholders is thus essential.”
Doris said the process must be fair and transparent, especially because the corrective actions are binding.
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