16 Jan 2025
The final report of the Fresh Produce Market Inquiry has been drawn up.
The trade, industry and competition department published the final report in Government Gazette 51902 in terms of section 43E(1) of the Competition Act of 1998.
The period for completion of the Inquiry and publication of the final report was extended in September 2024.
The Inquiry’s terms of reference were published in Gazette 48037 on 14 February 2023.
Comments on the draft terms of reference were sought in March 2022.
The terms of reference focused on background to the South African fresh produce market; rationale for the Inquiry; scope of the Inquiry; Inquiry timelines; Inquiry processes; and outcomes of the Inquiry.
The Inquiry sought to “consider if adverse effects are present in the fresh produce value chain arising from any feature or combination of features that impedes, restricts or distorts competition”.
The aim of the Inquiry was broadly to “examine whether there are any features in the fresh produce value chain which impede, restrict or distort competition in the South African fresh produce market, in short whether adverse effects on competition are present because of any such feature(s)”.
Three broad themes were identified that cover the features that may impede, restrict, or distort competition and market outcomes:
- Efficiency of the value chain, with an emphasis on the dynamics around fresh produce market facilities;
- Market dynamics of key inputs and its impact on producers; and
- Barriers to entry, expansion and participation.
Work on the Inquiry was set to wrap up on 1 October 2024.
According to the extension notice, the Competition Commission requested an extension to “allow for a reasonable period to further consider the draft final report, draft remedial actions and recommendations and to finalise engagements with certain affected stakeholders before a decision is taken on the report”.
The report’s conclusion points out that the Inquiry assessed the fresh produce value chain from the input level down to retail.
“In doing so, the FPMI sought to identify any market features or a combination of features that may impede, restrict or distort competition in various markets along the fresh produce value chain.”
Particular attention was paid to SME and HDP participation in the various markets.
The Inquiry noted instances in the fresh produce value chain which have high concentration levels, high barriers to entry, and limited competition.
31 remedies are set down to address the issues identified during the course of the Inquiry.
“By seeking to stimulate entry of fresh produce retailers and ensuring that pricing is more transparent, the FPMI seeks a greater amount of healthy competition in the retail of fresh produce, with an ultimate outcome in view of lowering prices for these essential foods.”
In a nutshell, the Inquiry seeks to “lay a foundation for a fresh produce value chain that is not only competitive, inclusive and transformed, but also sustainable”.
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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)