Businesses urged to engage fresh produce market inquiry

The Competition Commission's fresh produce market inquiry will start on March 31 and is expected to be completed in 18 months. 

The inquiry will focus on selected fruit and vegetables representative of the fresh produce value chain. It said the identified fruits and vegetables account for at least 70% of production and sales. These are apples, citrus, bananas, pears, table grapes, potatoes, onions, carrots, cabbage, tomatoes and spinach. 

Launching the inquiry on Thursday, competition commissioner Doris Tshepe said it believed there were market features, or a combination of features, which might impede, distort or restrict competition in the fresh produce value chain. 

This emanated from, among other things, complaints the commission received alleging anticompetitive conduct, and the commission’s food price studies since 2020 showing high price increases and volatility. 

She said the inquiry would focus on three areas of competition and public interest in the fresh produce value chain. These are outlined in the inquiry's terms of reference gazetted last month. 

First was the efficiency of the value chain. 

“This theme is focused on understanding the functioning of the fresh produce value chain in South Africa.”

Factors including levels of concentration, route to markets, costs of participation in the markets and barriers to entry would be investigated. 

Second was market dynamics and impact of inputs for growers. 

“Under this theme, the focus is on inputs for growers which include seeds, fertilisers, and agrochemicals. This theme is focused on the upper end of the value chain, particularly concentration levels, price discrimination, buyer power and exclusivity.” 

Third was barriers to entry facing small and medium enterprises and historically disadvantaged producers. 

“This theme is centred on the lower end of the value chain. Specifically, the inquiry will consider the barriers to entry faced by small and HDP growers and issues around access to input and output markets.”

Chairperson of the inquiry, deputy commissioner Hardin Ratshisusu, said where it found there were competition or public interest issues, the inquiry would make recommendations to foster competition and ensure equitable participation in the value chain for the benefit of all stakeholders and consumers. 

The issues the inquiry would be focused on would be highlighted in the statement of issues.

“The stakeholders can respond to the statement of issues, participate in public hearings and make written submissions to the fresh produce market inquiry,” Ratshisusu said, adding the inquiry would make specific information requests to stakeholders. 

The team consisted of commission employees led by Ruan Maree and Mogau Aphane. 

“All affected stakeholders, including those that will receive specific separate questions, are required to respond to the statement of issues. The success of this inquiry depends on the participation and full co-operation of stakeholders.” 

Maree said the targeted requests for information would be sent to organised business. “That is where we want specific information, such as production data and customer data. We are reaching out directly to firms.”

Ratshisusu said while the questions would require time for stakeholders to complete, it was a necessary step to ensure it obtained information and facts to understand the state of competition and factors that could impede or distort competition. 

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