Nine of South Africa’s largest market agents, altogether responsible for 80% of trade on the Johannesburg and Pretoria fresh produce markets, are under investigation from the Competition Commission for alleged cartel activities.
The commission raided the agencies on 23 and 24 March in Gauteng, Durban and Cape Town. The agents are suspected of forming a cartel to keep small, black agents and emerging farmers out of the market and keeping the price of fresh produce high. The commission argues the agencies colluded to unlawfully pin down the commission raised from farmers on 7.5%.
Deon van Zyl, sales director of the RSA market agency, said all agents gave their full cooperation. “We have nothing to hide. I think it will become clear that the records of our market agents are clear, regardless of the ongoing complaints and allegations against us.” He said market operations and payments to farmers will continue unaffected.
Chris Roux, an agent at the Subtropico agency (who is not under investigation), said the allegations are outrageous.
“It is a dog-eat-dog industry. Even when agents of different agencies are going out for a beer, it is to get information from each other to have a competitive advantage on the market. Farmers negotiate aggressively over commission. If they can deliver good volumes throughout the year, then we negotiate lower commission with them.”
Makgale Mohlala, cartel manager at the commission, described the alleged cartel activities as follow in radio interview with Power FM.
“All the agents come together early in the morning to agree on the very low prices they are going to get for products. As soon as the smaller agents are out of stock, the larger agents increase their price and sell their products for much higher than the daily average.”
The department of agriculture, forestry and fisheries as well as the commission declined to comment. Enterprises found guilty of cartel activities can be fined with 10% of their yearly turnover.
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