Price changes on the cards for Woolworths, Pick n Pay and Checkers in South Africa

 ·14 Jan 2025

South African shoppers may soon find it easier to compare prices and spot the best deals on fresh produce, thanks to a recent inquiry into competition in the market.

The Competition Commission’s recently published Fresh Produce Market Inquiry (FPMI) concluded that a lack of price transparency in formal retail was harming consumers.

The report found that inconsistent unit sizes used by retailers for pricing fresh produce make it nearly impossible to determine which store offers the best value.

The FPMI determined that consumers are harmed because most retailers display prices on a “per unit” basis using inconsistent unit sizes (e.g., 1kg, 1.5kg, 2kg, 5kg, etc.) rather than a per kilogram/gram price.

This is a global issue, and the FPMI drew on the experiences of other jurisdictions, including the United Kingdom, Australia, the European Union, and New Zealand, which have all taken steps to improve price transparency in the retail sector.

The FPMI initially recommended that the five largest retailers, Woolworths, Shoprite Checkers, SPAR, Food Lover’s Market and Pick n Pay, be required to display a price per kilogram or gram, in addition to the unit pricing they were already using.

This provisional remedy was largely rejected by the retailers, which cited concerns about costs, space constraints on labelling, and feasibility for certain products.

However, after further engagement, most retailers agreed to voluntarily implement the price transparency measures.

According to the report, SPAR was the only retailer that did not agree to voluntary implementation, and Massmart was added to the list of retailers because of its growing presence in the fresh produce market.

The commission now requires six major retailers to prominently display the price per 100 grams on all pre-packed fresh produce.

The retailers impacted by this new measure are:

  • Shoprite Checkers
  • Pick n Pay
  • Woolworths
  • SPAR
  • Food Lover’s Market
  • Massmart

The retailers are also encouraged to extend per 100 gram pricing to all fresh produce sold in their stores and ensure that this pricing is clearly and easily identifiable to consumers.

Other woes

The report identified other issues in the fresh produce value chain that are hurting consumers.

The National Fresh Produce Markets (NFPMs) face numerous issues hindering their role in food security and price discovery.

Municipal-owned markets in particular are plagued by outdated infrastructure, slow procurement, and inconsistent bylaws, creating barriers for smaller producers.

The report also found that market agents, intermediaries between farmers and buyers, engage in practices that distort price discovery, such as using personal buying cards and conducting off-hours sales, further disadvantaging small farmers.

The Agricultural Produce Agents Council (APAC) raises concerns over conflicts of interest due to its composition, limiting effective oversight.

Additionally, South Africa’s reliance on imported fertilisers and seed suppliers, coupled with price volatility, creates challenges for farmers.

Smaller producers are also burdened by costly quality standards like Global GAP certification, limiting market access. While large retailers have supplier development programs, they are inadequate in helping small producers meet these standards.

Smaller retailers struggle to enter the formal market due to the dominance of large retailers and restrictions like exclusive leases.

These challenges, compounded by limited resources, restrict the growth and participation of small and historically disadvantaged farmers in the fresh produce sector.

In a noteworthy development, the Competition Commission recommended that African Rainbow Capital, led by billionaire Patrice Motsepe, divest from one of South Africa’s largest fresh agricultural produce agencies due to concerns over competition.

African Rainbow holds substantial stakes in the RSA Group and Subtropico, which collectively control a significant portion of South Africa’s markets for staple fruit and vegetables.

Going forward

In response to these multifaceted challenges, the FPMI has issued 31 recommendations to foster a more competitive, inclusive, and transformed fresh produce market in South Africa.

These recommendations call for policy reforms, market restructuring, targeted support for small and historically disadvantaged producers, and increased transparency in pricing practices.

The implementation of these recommendations will require collaborative efforts from policymakers, industry participants, and civil society, with the ultimate goal of creating a fresh produce value chain that is equitable, efficient, and sustainable.


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