South African fresh produce value chain remains rarefied, report finds
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GUEST – Derrick Bowles - Principal Analyst at the Competition Commission
Some points of accord with the industry – the need to ringfence income generated by fresh produce markets and to invest in its ailing infrastructure – and some points sure to ruffle feathers in the Competition Commission's provisional report on its wide-ranging inquiry into the fresh produce value chain, from the price of seeds and water rights to retail floor space.
The domestic fresh produce market is estimated at over R53 billion (2.7 billion euros) annually, of that about R21 billion (1.08 billion euros) is sold through the national wholesale markets and R32 billion (1.6 billion euros) through formal retail.
The Commission has previously investigated allegations of price fixing by several market agencies, but since the matter is currently before the Competition Tribunal, it was left out of this inquiry. Practices by market agents such as stock reservation and reserve buying and credit sales could distort price discovery, it notes.
Some points of accord with the industry – the need to ringfence income generated by fresh produce markets and to invest in its ailing infrastructure – and some points sure to ruffle feathers in the Competition Commission's provisional report on its wide-ranging inquiry into the fresh produce value chain, from the price of seeds and water rights to retail floor space.
The domestic fresh produce market is estimated at over R53 billion (2.7 billion euros) annually, of that about R21 billion (1.08 billion euros) is sold through the national wholesale markets and R32 billion (1.6 billion euros) through formal retail.
The Commission has previously investigated allegations of price fixing by several market agencies, but since the matter is currently before the Competition Tribunal, it was left out of this inquiry. Practices by market agents such as stock reservation and reserve buying and credit sales could distort price discovery, it notes.