Adele Shevel

Adele Shevel

Possible areas of monopoly in the commodities of manufacturers were identified at a meeting called with suppliers by Pick n Pay, held yesterday.

The manufacturers - suppliers of Pick n Pay and other retailers - highlighted packaging, tin, paraffin, wax, glass and fertiliser as areas that may require further investigation. Where appropriate, suppliers were encouraged to report these to the Competition Commission.

The meeting was held to discuss food prices, many of which have been rising in spite of declining commodity prices.

Consumers have been reeling from heavy price increases in food, but have been slow to benefit from more recent declining commodity inputs.

Commodities such as maize and wheat have come down since June, and the price of fuel has declined by more than 60percent since September.

Nick Badminton, chief executive of Pick n Pay, said the situation was becoming untenable in a strongly worded letter that invited suppliers to the meeting.

Badminton described the meeting as constructive, engaging and open. An independent competition lawyer was present to ensure the conversation did not go "the wrong way".

"Suppliers have come out with a deeper understanding of consumer pressure, and we came out with a deeper understanding of the complexities behind the pricing," he said.

Badminton asked suppliers to investigate ways of cutting costs, to explore supply chain synergies and possible areas of improvement.

All 30 suppliers invited to the meeting were present, representing about 60percent of the group's sales. Pick n Pay holds about 33percent of the local food retail market.

Shoprite said in January it would pass on diesel savings of R27million to its customers. In a statement yesterday the group said fuel prices influence the cost of products to the consumer.

Ian Visser of Premier Foods said the company will publish a monthly report on food input costs. This will be researched by an independent economic house.

He added that the company had reduced the price of Snowflake flour and Blue Ribbon bread by double digits since September last year.