South Africa's local fresh produce industry welcomed the Competition Commission's enquiry with the draft report expected on 31 May, 2024. Tanel du Plooy, Vice Registrar of South Africa's Agricultural Produce Agents Council (Apac) says, "price collusion and price fixing is not an issue on the South African local market."
Apac is the regulatory body of fresh produce agents in South Africa, which include exporters of fresh produce. Du Plooy was speaking at the International Fresh Produce Association Southern Africa's Fresh Solutions seminar held in Cape Town last week. Audience members included some of South Africa's key fruit export companies, growers and local market fresh produce agents.
On 25 March 2022, the Competition Commission issued their intent to have the market inquiry. Their aim is to evaluate the whole value chain up to where fresh produce reaches the consumer. "There are three key areas they are looking at, the efficiency of the value chain, key inputs and barriers to entry and participation of all players. They identified the national markets, which are key in price setting. We are participating in the inquiry to show we are transparent. We welcome this inquiry. As Apac we actively look at agents' trust accounts, to ensure that consumers are covered."
Du Plooy says they are confident that the market agents, who they regulate, are above board. "They are the unsung heroes. They discover the price, the farmers get what they need and consumers get a fair price. The Competition Commission has sharp teeth, they can make legally binding findings. On 31 May, 2024 their provisional report will be released. The final report will be gazetted in October."
She says there are some unresolved issues in the industry following a raid by the Competition Commission many years ago. "The elephant in the room is that, in March 2017, the High Court had already ordered 9 agents at Joburg/Tshwane to be raided, but the Competition Commission never made a finding on this. These agents lost millions of Rands, their businesses were negatively impacted."
Audience members asked du Plooy what changes see sees the Commission possibly making to the fresh produce supply chain. "Price collusion and price fixing are not an issue on the market. I don't see any change on the agents side. For the wholesale and retail sector's I can't answer," was her response.
Jaco Oosthuizen, CEO of the leading local market agents the RSA Group and IFPA Southern Africa country board chairman, said the issue is not on market concentration, but the Commission looks to see if written contracts are in place. "But, we have no contracts, it's based on your performance as agent. 5% of the money a farmer spends goes to the local Council, but the money is not spent on the infrastructure. Perhaps the South African markets are the most competitive, due to no contracts being in place and the high level of transparency."
Francois Knowles, Registrar of Apac, said they had a very warm, positive reception and engagement with the Competition Commission team. "They are not on a witch hunt. We have to engage them, give them the information. It's going to be interesting in the next six months when the draft report it is out. Go ahead and comment on it. I don't see it as something bad and damaging to the industry. We have to focus on what's wrong but I don't think there's much wrong."
For more information:
Tanel du Plooy
Apac
Tel: +27 11 8943680
Email: [email protected]
www.apacweb.org.za