Fruit and veg suppliers raided by Competition Commission

The Competition Commission has raided the premises of nine Gauteng-based fruit and vegetable businesses‚ who are accused of running a cartel to undercut the prices of their competitors.

“The Commission is concerned with the prevalence of collusion in the food sector‚ as higher prices of these commodities affect the most vulnerable households. The poor spend a disproportionally high percentage of their income on food‚” commissioner Tembinkosi Bonakele said on Thursday.

The suspects are the Botha Roodt Group‚ Subtropico‚ the RSA Group‚ Dapper Market Agents‚ DW Fresh Produce‚ Farmers Trust‚ Noordvaal Market Agents‚ Marco Fresh Produce Market Agency and Wenpro Market Agents.

Search and seizure operations were conducted at their premises on Thursday morning.

The businesses allegedly charge far below the market price for produce during certain agreed periods of the trading day. When smaller businesses run out of stock‚ they then allegedly increase their prices and coordinate the timing of the increases.

“Thus‚ certain volumes of stock of fresh produce are sold during late hours of trading with the aim to manipulate prices‚” the commission said.

The alleged cartelists are also accused of reserving the best produce grades for certain buyers and practicing “price discrimination” based on the identities of retailers.

“Given the sheer size of the suspects‚ the suspected cartel conduct results in large proportion of freshly produced fruits and vegetables being sold at much higher prices than the average daily selling price‚” the commission said.

According to the commission‚ there are about 30 fresh produce agents in the country‚ with about six major players accounting for the biggest chunk of the market.

“Cartel activities in this sector serve to keep out emerging black farmers and agents out of the market. It is for these reasons that this sector ranks high in our priority list‚ and cartels‚ big or small‚ will be rooted out‚” Bonakele said.