Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.
posted 3 years ago
The South African Competition Commission (“Commission”), recently released its draft terms of reference (“Terms of Reference”) in relation to a fresh produce market inquiry (“Fresh Produce Market Inquiry”/“Inquiry”). The Fresh Produce Market Inquiry is essentially intended to identify the features in the market which have the potential to inhibit, influence or alter competition. The aim of the Terms of Reference, which is to be established under the auspices of sections 43B(2) and (4) of the Competition Act 89 of 1998 (“Act”), will be to restrict the Fresh Produce Market Inquiry’s scope.
In order to understand the rationale behind the Fresh Produce Market Inquiry, it is helpful to also consider the findings of the Commission following its analysis of the concentration levels within South African markets. One of the findings was that 67% of the total 2017/2018 fresh market income was derived from large farms, despite these farms only comprising 6.5% of the total of farms in the country. In addition, it was identified by the same study that from 1993 until 2017, farming units had decreased by an astounding 31%. Following these findings, the Essential Food Price Monitoring Report (“Report”) was published by the Commission in August 2021. The Report highlighted the difficulties which small and HDP farmers were facing in attempting to reach economies of scale to lower their costs and boost profits, as was evidenced by the drastic decrease in commercial farming initiatives.
The conclusion reached in both these analyses was that the cost of fresh produce in South Africa has risen above inflation levels. According to the Fresh Produce Market Inquiry:
“In nominal terms, the average increases in market prices per ton of cabbages, tomatoes, and potatoes were 9.6 %, 8.2 %, and 6.9 % respectively in 2019 compared to 2018. The average market price of onions was 8.8 % lower in 2019 compared to 2018. The fruit sector was also subjected to increase in prices. For example, the average market prices per ton of bananas, oranges and apples were 9.3 %, 8.3 % and 5.1 % respectively higher in 2019 than in 2018.”
As a result, the Commission is set to identify specific factors which may be inhibiting, influencing or altering competition in the fresh produce market, and it intends to do so through the Fresh Produce Market Inquiry.
The Commission has divided the Fresh Market Inquiry into four specific themes, which the Terms of Reference delineated as follows:
The Fresh Produce Market Inquiry does not include the interaction of end consumers, as well as retailers.
The time frame which has been provided for commencement of the Fresh Produce Market Inquiry is 20 days following the publication of the final Terms of Reference. After commencement, the Inquiry must be completed within 18 months. Once completed, the Commission is obliged to present the Minister of Trade, Industry and Competition with a report of the Inquiry and in terms of the mandate granted to the Commission under section 43E of the Act, it must also present certain recommendations. These recommendations cover, inter alia, new or amended policy, legislation, regulations or recommendations to other regulatory agencies concerning cases where there is a competition law issue.
It is clear from the above that through the Inquiry, the Commission is given an almost unfettered discretion to investigate markets for those who have potentially adversely affected competition. In addition, it is mandated with further investigative powers to also introduce recommendations as to how to resolve any anticompetitive impacts in the market which would have a largely prejudicial outcome for the private sector.
posted 15 hours ago
posted 3 days ago
posted 3 days ago
posted 5 days ago
posted 6 days ago
posted 6 days ago
No results available
ResetFind the right Legal Expert for your business
Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.