Retailers Must Price Fresh Produce Per 100g to Boost Transparency, Says Competition Commission

South African consumers are set to benefit from improved pricing transparency in the fresh produce sector, following a directive by the Competition Commission. The mandate requires major retailers—Shoprite, Pick n Pay, Woolworths, Spar, and Food Lover’s Market—to display prices for fresh produce per 100 grams.

This move is part of the Commission’s efforts to address the challenges identified in the fresh produce market, a sector valued at R53 billion annually.

Improving Consumer Transparency

Hardin Ratshisusu, the deputy commissioner of the Competition Commission, highlighted that inconsistent pricing formats among retailers create significant barriers for consumers trying to compare prices effectively.

“The lack of transparency in unit pricing distorts competition, making it difficult for consumers to make informed choices,” Ratshisusu said.

For example, one retailer may sell tomatoes in a 3kg bag, while another sells them per kilogram, complicating price comparisons. The new requirement ensures that prices for 11 key fresh produce items—apples, citrus, bananas, pears, table grapes, potatoes, onions, carrots, cabbage, tomatoes, and spinach—will be displayed per 100g across all participating retailers.

Findings of the Inquiry

The directive is the result of an in-depth investigation into the fresh produce market, initiated in March 2023. The investigation identified systemic inefficiencies and market distortions, including:

• Inefficient municipal fresh produce markets.
• High input costs for fertilizers and seeds.
• Regulatory barriers.
• Market concentration within the fresh produce agency sector.

Market Concentration Challenges

The inquiry revealed significant market concentration, with African Rainbow Capital (ARC) owning substantial stakes in RSA Group and Subtropico—two market agents holding 90% of the market share.

This alignment of economic interests was found to restrict competition, leading to a recommendation for ARC to divest its shareholding in one of the agencies. The divested shares must be sold to a historically disadvantaged entity.

A Lifeline for Households and Farmers

Minister of Trade, Industry, and Competition Parks Tau emphasized the importance of the fresh produce sector:

“The fresh produce market is a lifeline for households, a source of livelihood for farmers, and a driver of food security. This report highlights systemic challenges that hinder its full potential.”

With 31 actionable remedies outlined in the report, the Competition Commission aims to address inefficiencies and support the sector’s contribution to food security and economic growth.

Timeline for Implementation

Retailers have been given 12 months to implement these changes, ensuring that pricing is clear and displayed prominently. Additionally, the Commission will present its findings and recommendations to parliament to ensure timely action.

The Competition Commission’s directive for standardised fresh produce pricing is a win for South African consumers and a step toward improving fairness and transparency in the retail sector. By enabling like-for-like price comparisons, the move ensures that shoppers can make informed choices while fostering a more competitive market.

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com