“Price manipulation and collusion are not an issue in South African fresh produce markets”

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The local South African fresh produce sector has welcomed the inquiry of the Competition Commission and the report’s draft is expected by the 31st of May in 2024. Tanel du Plooy is the Vice Director of the South African Agricultural Produce Agents Council (Apac) states that “price manipulation and price fixing are not an issue for this South African local market.”

Apac is the regulator of fresh produce producers within South Africa, which include exporters of fresh products. Du Plooy was speaking at the International Fresh Produce Association Southern Africa’s Fresh Solutions seminar held in Cape Town last week. Participants included many of South Africa’s major exporters of fruit, as well as growers as well as local market fresh fruit agents.

The 25th March of 2022 was the date that the Competition Commission issued their intent to conduct a market inquiry. The goal is to assess the entire value chain right up to the point that fresh produce is delivered to the customer. “There are three main issues they’re looking at the efficacy of value chains, important elements and obstacles for entry as well as participation by the entire industry. They have identified national markets as a key factor to price setting. We’re participating in this inquiry to demonstrate that our transparency. We appreciate this question. As Apac We are always looking into the trust accounts of agents, in order to make sure that customers are adequately protected.”

Du Plooy says they are certain that market agents whom they supervise are in good standing. “They are the unheroes. They determine the cost that farmers pay, they get the amount they want, and consumers are provided with the best cost. It is the Competition Commission has sharp teeth and can issue legally binding decisions. At the end of May 2024, the preliminary report of the Commission is due to be made public. The report’s final version will be released in October.”

There are problems that remain unresolved in the business after a raid conducted that was conducted by the Competition Commission many years ago. “The problem is that in the month of March of 2017 it was reported that it was reported that the High Court had already ordered 9 agents from Joburg/Tshwane be searched, however the Competition Commission never made a conclusion on this. Agents lost millions of Rands as their businesses were adversely affected.”

The audience members were asked by du Plooy what changes see as the Commission possible doing to the fresh-cut produce supply chain. “Price collusion and price fixing is not an issue in the marketplace. I haven’t seen any changes from the agent’s perspective. Retail and wholesale sectors, I’m unable to provide an answer.” was her reply.

Jaco Oosthuizen, CEO of the top local market agent The RSA Group and IFPA Southern Africa chairperson of the country’s board was quoted as saying that the problem isn’t about market concentration but rather the Commission will be looking to determine if there are written contracts in place. “But we don’t have agreements, they are dependent on the performance of your agent. 5percent of what that a farmer pays goes to local Council and the rest isn’t used to fund infrastructure. Maybe this is why the South African markets are the most competitive because of there being no contract in place as well as the level in transparency.”

Francois Knowles, Registrar at Apac said they got an extremely warm and positive welcome and interaction in Apac’s Competition Commission team. “They don’t have the hunt for witches. It is our responsibility to get them involved to provide them with information. It will be interesting during the next six months, when the draft report comes out. Comment on the report. It’s not an issue that is damaging or bad for the business. There is a need to be a focus on the issues, however I’m not sure there’s anything wrong with it.”

More information is available here:

Tanel du Plooy

Apac

Tel: +27 11 8943680

Email: tanel@apacouncil.co.za

www.apacweb.org.za

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