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Competition Commission sets its sights on fruit and veg value chain

Home Agriculture Competition Commission sets its sights on fruit and veg value chain

ON March 31, the Competition Commission will commence the Fresh Produce Market Inquiry (FPMI) to examine whether any features in fresh produce value chain impede, restrict, or distort competition in the market.

“The food and agro-processing sector has been a priority for the Commission since 2008 due to its significant contribution to the economy broadly and its potential to serve as a driver of inclusive growth in the South African economy.

It is for these reasons that the Commission, through the FPMI, intends to conduct an inquiry into the fresh produce value chain, in order to understand its functioning and the features, or combination of features, that may be impeding competition and participation,” said commissioner Doris Tshepe in her opening remarks.

The market inquiry will focus on particular issues at each layer of the value chain, including the sale of fresh produce by the farmer to the customer (the retailer, processor, or export market).

The Commission has identified three themes that cover the entire fresh produce value chain. The themes are as follows:

  • Efficiency of the value chain, with an emphasis on the dynamics around fresh produce market facilities.
  • Market dynamics of key inputs and their impact on producers.
  • Barriers to entry, expansion, and participation.

Deputy commissioner Hardin Ratshisusu, who will be chairing the inquiry, said: “The main objective of the FPMI is to identify features, or combination of features, that inhibit or distort competition and participation in the fresh produce value chain. Where there are competition and/or public interest issues, the FPMI will provide recommendations to foster competition and ensure equitable and meaningful participation in the value chain for the benefit of all stakeholders as well as consumers in the economy.”

The FPMI will focus on a sample of fruits and vegetables that are representative of the fresh produce value chain. The identified fruits and vegetables account for at least 70% of the production and sale of these products throughout South Africa. They are:

  • Five fruits – apples, citrus, bananas, pears, and table grapes.
  • Six vegetables – potatoes, onions, carrots, cabbage, tomatoes, and spinach.

Among key stakeholders in attendance were representatives from Agri SA and CGA Grower Development Company.

The Commission also published the following important documents which can be accessed on its website: Statement of Issues (SOI), guidelines for participation, and the administrative timetable.

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