The RSA Group, one of the nine fresh produce agencies recently investigated for possible collusion and price-fixing by the Competition Commission (CompCom), said in a media statement that the CompCom’s allegations of collusion at fresh produce markets across South Africa were based on a misconception of how the markets operated.
In the media statement issued by the RSA Group, Jaco Oosthuizen, managing director of the RSA Group, said that the company would cooperate with the CompCom during its investigations, and had confidence that a thorough examination of the facts would set the record straight.
Farmer’s Weekly previously reported that the CompCom had recently raided the offices of nine fresh produce market agencies at the Johannesburg and Tshwane fresh produce markets, including those of Subtropico and the RSA Group.
The CompCom alleged that these agencies were involved in prohibited and coordinated activities aimed at undercutting the prices charged by smaller intermediaries by charging far below the market price for certain agreed upon periods of a trading day.
It was further alleged that the agencies had kept their prices unsustainably low during these periods, and increased prices as soon as the smaller agencies had depleted their stocks.
“Not only are fresh produce markets highly competitive, fluid and transparent platforms, but they are also regulated by legislation [Act 12 of 1992] and monitored by a regulator, who is appointed by the relevant minister. Market forces, coupled with the monitoring of agents’ activities by the regulator, [unite] to mitigate against suggestions of collusive engagement,” Oosthuizen said in the media release.
According to Oosthuizen, there were many unpredictable factors that impacted pricing decisions during trading hours, from hostile weather, product quality and perishability, to supply and demand dynamics.
If sales agents did not respond quickly and effectively in setting the right price, producers and buyers took their business to rivals, in or outside the market.
The CompCom had not replied to queries by the time of going to print.
