RSA Group denies collusion over fresh produce prices
THE RSA Group has denied involvement in the alleged collusion and cartel conduct of Gauteng fresh produce market agents, saying the allegations were based on misconceptions of how the markets operate.
The group, an agent that serves as a market intermediary between farmers and buyers of freshly produced fruits and vegetables, was one of nine firms targeted by the Competition Commission in a number of search-and-seizure operations carried out at fresh produce markets across the country last week.
Co-operating Managing director Jaco Oosthuizen said in a statement they would be co-operating with the commission’s investigation.
“The RSA Group believes that these allegations are based on a number of misconceptions as to how the markets operate,” Oosthuizen said.
“We will co-operate with and assist the commission as it goes about its investigation, and have confidence that a thorough ventilation of the relevant facts and circumstances will set the record straight.”
The commission said it had reasonable grounds to suspect that larger market agents fix their commission rates and co-ordinate their pricing activities to squeeze out smaller rivals.
It is one of nine firms targeted by the Competition Commission for squeezing out the smaller operators
The anti-graft agency said the agents were allegedly involved in prohibited co-ordinated activities aimed at undercutting the prices charged by smaller intermediaries by charging way below the market price for certain agreed periods of a trading day.
It said they also kept prices unsustainably low during these periods and quickly increase prices significantly as soon as the smaller agents run out of stock.
Certain volumes of stock of fresh produce are thought to be sold during late hours of trading in a bid to manipulate prices.
Oosthuizen said not only were fresh produce markets highly competitive, fluid and transparent platforms but they were also regulated by legislation and monitored by a regulator appointed by the minister of agriculture, fisheries and forestry.
He said collusion for any purpose, whether to compete with major competitors or to drive out small players, was at odds with how a price discovery market functions.
Impact “There are many fast-moving forces that impact pricing decisions during trading hours, ranging from hostile weather, product quality and perishability to supply and demand dynamics,” Oosthuizen said.
“These all contribute to price volatility. If sales agents don’t respond quickly and effectively in finding the right price, the producers and buyers look to rivals in the market or outside the market, for their business.
While sales agents may react to changing market forces this is not suggestive of collusive conduct. – ANA