The Competition Commission recently raided the offices of nine market agencies at the Johannesburg and Tshwane fresh produce markets following allegations of collusion and price-fixing.
According to a CompCom statement, these agencies, which served as fresh produce market intermediaries between farmers and buyers, were suspected of being involved in cartel activities and price-fixing in contravention of the Competition Act.
The nine agencies suspected of collusion were the Botha Roodt Group (Botha Roodt), Subtropico Market Agents (Pty) Ltd (Subtropico); RSA Group (Pty) Ltd (RSA Group); Dapper Market Agents (Pty) Ltd (Dapper); DW Fresh Produce CC (DW Fresh); Farmers Trust CC (Farmers Trust); Noordvaal Market Agents (Pty) Ltd (Noordvaal); Marco Fresh Produce Market Agency (Marco); and Wenpro Market Agents CC (Wenpro).
Anton Vos, managing director of Subtropico Market Agents, said that if the company were ultimately charged, Subtropico would oppose the action.
The CompCom and members of the South African Police Service raided Subtropico’s offices and made copies of its hard drives. According to Vos, Subtropico had cooperated fully.
“The allegations are false. There is no way that we would get together with our competitors to determine a market price as we all compete for the same client base. Market prices are determined by the quality of produce, packaging, brand, age, and supply and demand. Agents have to take trends into account and then determine price,” Vos said.
CompCom stated: “It is alleged that the agents are involved in prohibited, coordinated activities aimed at undercutting the prices charged by smaller intermediaries by charging far below the market price for certain agreed periods of a trading day. It is further alleged that the suspected agents keep their prices unsustainably low during these periods and quickly increase prices significantly as soon as the smaller agents run out of stock.”
It was also suspected that these agencies were reserving certain fresh produce grades for particular buyers. Cartel conduct resulted in a large proportion of freshly produced fruits and vegetables being sold at much higher prices than the average daily selling price.
Farmer’s Weekly previously reported on the recently uncovered fraud of more than R7,5 million at the Joburg Fresh Produce Market. Three officials at the market and their suppliers defrauded the City by misrepresenting the quantities of goods received via the market’s procurement processes, according to the head of Johannesburg’s anti-corruption unit, General Shadrack Sibiya.