FRESH PRODUCE MARKET INQUIRY TO BEGIN SOON

FRESH PRODUCE MARKET INQUIRY TO BEGIN SOON

• 14 February 2023
• Trade, Industry & Competition
• SA Legal Academy

The Department of Trade, Industry & Competition has gazetted the terms of reference for a Competition Commission inquiry into the fresh produce market, which will begin on a date to be announced ‘at least 20 business days’ from the date of the Government Gazette notice.

According to a study conducted by the Commission in 2019 on levels of concentration in the South African economy, ‘while large farms make up just 6.5% of all farms in South Africa, they accounted for 67% of total income in 2017/18’. This is noting that, during the past two decades, ‘there been a significant reduction in the number of farming units … with KwaZulu-Natal, Mpumalanga and Limpopo experiencing the largest declines in percentage terms’.

In the Commission’s view – supported by its research into essential food prices – a ‘sharp decline in the number of commercial farms may be indicative of the difficulties smaller farmers face in reaching the necessary economies of scale to decrease costs and maintain profitability’. Another challenge is the potential for abusive conduct where market circumstances change suddenly, as they did during the Covid-19 pandemic. At the time, evidence of basic food and fresh produce price gouging underscored the importance of addressing these issues.

• terms of reference

Published by SA Legal Academy Policy Watch

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