Fruit and veg car­tel al­le­ga­tion is ‘lu­di­crous’

CityPress - - Business - DE­WALD VAN RENS­BURG de­wald.vrens­burg@city­press.co.za

Ma­jor fresh-pro­duce mar­ket agents this week lashed out in re­sponse to ac­cu­sa­tions that they were op­er­at­ing a car­tel to push out small com­peti­tors and fix the com­mis­sions they charged South Africa’s farm­ers.

The Com­pe­ti­tion Com­mis­sion raided the of­fices of large agents in Jo­han­nes­burg and Tsh­wane on Thurs­day, and ex­panded the op­er­a­tion to Cape Town and Dur­ban on Fri­day.

The agents op­er­ate at the 19 mu­nic­i­pal mar­kets where much of South Africa’s farm pro­duce is sold.

The com­plaint lead­ing to the raids was laid al­most two years ago, in July 2015, by Mo­gala Mam­abolo, the di­rec­tor of mar­ket­ing at the de­part­ment of agri­cul­ture, forestry and fish­eries.

The fresh pro­duce mar­kets sell about 3.4 mil­lion tons of fruit and veg­eta­bles a year, worth about R14 bil­lion. A small group of large agents is re­spon­si­ble for most of th­ese pro­ceeds.

The Jo­han­nes­burg mar­ket ac­counts for 43% of sales. Tsh­wane ac­counts for 20%, while Cape Town and Dur­ban each ac­count for about 10% of sales.

The com­mis­sion does not yet have an es­ti­mate of the ex­tent to which the agents al­legedly dis­torted prices – or when the al­leged col­lu­sion started, said spokesper­son Sipho Ng­wema.

The com­mis­sion sus­pects the agents of price fix­ing – more specif­i­cally, that they al­legedly ma­nip­u­late prices down early in the day to force smaller agents to sell out their goods at lower cost, be­fore rais­ing prices near the end of the trad­ing day to ben­e­fit them­selves. The mar­kets op­er­ate be­tween 5am and 11am. The com­mis­sion also claims that the big agents are col­lud­ing to fix the com­mis­sion rate they charge farm­ers for sell­ing their goods at the mar­kets.

If th­ese al­le­ga­tions are true, the al­leged car­tel would be ma­nip­u­lat­ing the chan­nel through which roughly half of all South Africa’s fresh farm pro­duce gets sold.

The rest is ex­ported or sold di­rectly from farms.

Back­lash

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