By BO Staff Writer
This morning, the Competition Commission searched the premises of nine fruit and vegetable market agents‚ who it accuses of running a cartel to undercut the prices of their competitors.
The raid involves a search and seizure operation that is part of the investigation into the conduct of the cartel that amounts to collusion which is in contravention of Section 4 (1)(b)(i) of the Competition Act.
“The Commission is concerned with the prevalence of collusion in the food sector‚ as higher prices of these commodities affect the most vulnerable households. The poor spend a disproportionally high percentage of their income on food‚” commissioner Tembinkosi Bonakele said on Thursday.
The market agents are all white owned businesses which account for 80% of the fresh produce market. The colluders are the Botha Roodt Group‚ Subtropico‚ the RSA Group‚ Dapper Market Agents‚ DW Fresh Produce‚ Farmers Trust‚ Noordvaal Market Agents‚ Marco Fresh Produce Market Agency and Wenpro Market Agents.
“Cartel activities in this sector serve to keep out emerging black farmers and agents out of the market. It is for these reasons that this sector ranks high in our priority list‚ and cartels‚ big or small‚ will be rooted out‚” Bonakele said.
Fresh produce market agents are “intermediaries between farmers and buyers of freshly produced fruits and vegetables.” Their acitivities include “selling fresh fruits and vegetables on behalf of farmers, for a commission, to buyers including wholesalers, retailers and hawkers.”
The commission says these businesses charge far below the market price for produce during certain agreed periods of the trading day. When smaller businesses run out of stock‚ they then allegedly increase their prices and coordinate the timing of the increases.
The cartels also reserve the best produce for certain buyers and practice “price discrimination” based on the identities of retailers.