With food prices continuing to increase every month, often well above general inflation, the Competition Commission yesterday indicated it was proceeding with an investigation into the fresh produce market.
Statistics SA yesterday confirmed what consumers who buy groceries every month will know, that food prices are continuing to rise. It said annual food and non-alcoholic beverages inflation climbed to 13.4% in January, the highest reading since April 2009, when the rate was 13.6%.
Of all the products in the CPI basket, bread and cereals recorded the highest rate in January (21.8%). This was up from 20.6% in December and was the highest reading for this category since February 2009 (23.8%).
Data released by the Pietermaritzburg Economic Justice and Dignity Group (PMBJED) recently also showed sharp annual price increases. Its data on the most commonly bought foods in supermarkets around the country showed that, year-on-year, an average food basket price had increased by 11.7% in January.
Some of the notable year-on-year average increases well above inflation recorded by the PMBJED were maize meal (17%), cake flour (28%), samp (29%), cooking oil (32%), onions (75%), potatoes (30%), cabbage (19%) and white and brown bread (18%).
Meanwhile, the Competition Commission yesterday published the final terms of reference for its inquiry into competition in the Fresh Produce Market, a probe that had arisen as a result of complaints about fast-rising food prices, last year.
The commission said the publication of terms of reference had followed consultations it had with industry participants and stakeholders, on draft terms of reference published in March 2022.
“The purpose is to examine whether there are any features in the fresh produce value chain that impede, restrict, or distort competition in the market. The inquiry will focus on particular issues at each layer of the value chain. Specifically, the scope of the inquiry will cover aspects from the sale of fresh produce by the farmer to the customer (the retailer, processor, or export market).”
The commission identified three themes it would investigate. The first was the efficiency of the value chain, with an emphasis on the dynamics around fresh produce market facilities.
A specific focus would be around the competition dynamics at national fresh produce markets and other contracting means, such as direct contracting by processors, wholesalers, and retailers, which affects competition in the market.
The second theme involved the dynamics of key inputs and its impacts on producers, such as aspects relating to seeds, fertiliser and agrochemicals.
The third theme was barriers to entry, expansion and participation. Special consideration would be given to the barriers faced by small, medium and micro enterprises and firms owned or controlled by historically disadvantaged persons.
BUSINESS REPORT