News / Legal Brief

Market Inquiry: South African Fresh Produce Market

Mar 28,2022

by Ahmore Burger-Smidt, Director and Head of Data Privacy and Cybercrime Practice and member of the Competition Law Practice and Nyiko Mathebula, Associate Designate

The Competition Commission of South Africa (“the Commission“) has published the draft Terms of Reference regarding its intended market inquiry into the Fresh Produce Market. Interested parties have until 25 April 2022 to submit written submissions to the Commission.

The Commission is of the belief that the Fresh Produce Market may have features that impede, distort, or restrict competitiveness within that market. As such, it intends to investigate the whole value chain of the fresh produce industry from the input level to end-user consumption. This includes role players such as –

LEVEL IN VALUE CHAIN EXAMPLE
INPUTS Seed & fertilizer companies; farm equipment suppliers; agrochemical companies
PRODUCERS Large‑scale producers and small‑scale growers
WHOLESALE Produce Markets (national fresh produce markets)
INTERMEDIARIES Exporters and processors
WHOLESALE‑RETAIL Distribution centres
RETAIL Formal and informal traders
CONSUMERS Local consumers and foreign market consumers

Part of the Commission’s concerns centres around the cost of fresh produce (i.e., price) and barriers to entry for fresh produce farmers (especially small‑scale and emerging farmers). On a broad level, the Commission deems it necessary to canvass the following –

  • the efficiency of the value chain;
  • market dynamics and impact of key inputs for growers;
  • small and HDP growers and participation; and
  • barriers to entry in relation to the regulatory environment.

Consequently, the comment period presents an opportunity for role players in the fresh produce industry to participate in this process and help shape the focus of the South African Fresh Produce Market Inquiry. In so doing, the eventual thinking and understanding of the issues that the Commission will be investigating can also be shaped.

For more details, contact us at aburgersmidt@werksmans.com or pkrusche@werksmans.com.

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