Supermarket probe welcomed
2 July 2009
The alarming increase in the cost of basic foods over the past year has increased suspicion of possible collusion along South Africa's entire food value chain, human rights organisation The Black Sash said on Wednesday.
"The Black Sash welcomes the Competition Commission's food price probe into South Africa's biggest supermarket chains," it said in a statement.
"The alarming increase in the cost of basic foods over the past year, coupled with the uncovering of various cartel activities in the milling, dairy and poultry industries, has increased suspicion of possible collusion along the entire food value chain."
This followed the announcement on Monday by the Competition Commission that it had initiated an investigation into major South African supermarket chains for possible contraventions of the Competition Act.
The Black Sash added that the public had the right to know exactly what was happening in the supermarket industry. "We salute the commission for their interventions to root out any immoral profiteering from food."
The organisation maintained that there was more than an abstract principle at stake. "Collusive business practices have a very real and severe impact on the quality of life of ordinary South Africans who struggle each day to put a meal on the table, especially during our current recession."
Recent research by the University of South Africa (Unisa) showed that the poorest 20% of South Africa's households spent 57% of their total income on food.
High food prices also eroded the gains made by the government in rolling out social security to the most vulnerable members of society, The Black Sash said.
"A recent example of this is the effect of high prices on the purchasing power of social grants and the subsequent adjustment that government has had to make to address this impact."
The Black Sash intended following the Competition Commission's investigation very closely.
"We will continue to advocate that any fines imposed on those found guilty of anti-competitive practices be based on the full extent and duration of their illegal activity, and that penalties are imposed not just on the companies involved, but also on their chief executive officers (who are ultimately responsible)."
As an organisation that fought to make human rights real, The Black Sash said it was only fair that monies recovered through fines be used to compensate consumers and support food security programmes.
In a statement on Wednesday, the Food and Allied Workers Union (Fawu) also welcomed the commission's probe into food price-fixing.
"Fawu has always believed that anti-competitive conduct, such as price-fixing and excessive pricing, is behind skyrocketing food prices," the union said. "Fawu feels vindicated by this investigation."
The union called on the four retail companies mentioned by the commission – Pick n Pay, Shoprite-Checkers, Woolworths and Spar – to fully co-operate and fully disclose all required information.
The commission would also investigate the major wholesaler-retailers, Massmart and Metcash, for alleged contraventions of sections 4(1)(a), 5(1) and 8(c) of the Competition Act.
Sapa
