Investigation into South African fresh produce gets underway

The focus will be on the efficiency of the value chain, particularly fresh produce marketing facilities, market dynamics of key inputs and their impact on producers, and barriers to entry, expansion and participation.

The competition commission said that the focus on value chain efficiency stemmed from stakeholder concerns that it was inefficient and uncompetitive, particularly at a National Fresh Produce Markets (NFPMs) level. A specific focus will be on the competition dynamics prevalent at NFPMs and other contracting means, such as direct contracting, which may affect competitive dynamics.

The role of retailers is also likely to come under scrutiny, particularly in term of whether they grant fair access to producers through fair contracting systems. 

In terms of key inputs and their impact on producers, the commission is to investigate concentration levels, price discrimination (if any), buyer power and exclusivity. The focus here is on the upper end of the fresh produce value chain.

The work will be concluded at the end of July, followed by a period of public hearings. The draft report will be published at the end of March next year and the recommendation will be in the Government Gazette in October next year. This could mark the most important moment in the sector since the deciduous fruit, table grape and citrus sectors were formalised in 1998.