The Competition Commission says consumers have been subjected to “unjustified price increases” for staple foods in South Africa.
The Competition Commission says that South African consumers have been subjected to unjustified price increases for sunflower oil, white and brown bread over the last two years – and may have also been subjected to “opportunistic price increases” for maize meal over the same period.The EFMP is the eighth report published since 2020, where the commission tracks the pricing of specific and essential food types.
Examples include larger differences between what farms get paid for food items and in-store prices, growing margins at the processor and retailer level, and potential opportunistic pricing behaviour for staple food products such as bread and cooking oil. “The spotlight on conduct by processors of cooking oils in the August EFPM report likely contributed to this decline, and those companies remain under investigation,” the commission said.However, the steeper decline in wholesale prices relative to retail prices has resulted in the retail margin increasing to 38% in December 2022 from 22% in March 2022.
This implies that increases to shelf prices – R15.47 to R18.62 for white bread and R13.99 to R16.61 for brown bread – may not be justified by costs. Vegetables are largely insulated from global markets and reflect domestic market outcomes. Over the year 2022, the prices of carrots, potatoes, and cabbage were generally stable and in the case of carrots and potatoes declined during the middle of the year rising from September onwards.
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