Fresh produce market inquiry is not a witch hunt

Estimated reading time: 4 minutes

The Competition Commission’s inquiry into the operations of the fresh produce markets is not a witch hunt. Tanel du Plooy, deputy registrar of the Agricultural Produce Agents Council (APAC) said APAC welcomes the inquiry. The investigation is nearly complete, and the provisional report will be released by the end of May.

Du Plooy shared insights about the inquiry during the International Fresh Produce Association’s (IFPA) Fresh Solutions Event. The event recently took place at Cavalli Estate near Somerset West in the Western Cape.

APAC is a statutory body that regulates the occupations of fresh produce, export, and livestock agents and maintains and enhances the status, dignity and integrity of those occupations and the persons involved. “We regulate agents, and the word ethics is very important in our environment”, she said.

“As a regulator, APAC works very closely with the Competition Commission because many of our objectives are aligned,” said Du Plooy. The commission published its intent to conduct a fresh produce market inquiry two years ago on 25 March 2022.

Read more about the Fresh Solutions event.

Inquiry targets the entire value chain

The inquiry was not aimed at a particular firm or business. It is a formal inquiry into the overall state of competition, concentration levels and the structure of a market. The goal is to assess whether any adverse effects exist in the fresh produce value chain that might impede, restrict and distort competition.

Du Plooy said it is important to know that the focus of the inquiry is not only on agents or producers. It is the entire value chain, from the initial inputs to the point where products reach consumers. “Therefore, the participation of the entire industry is so important to demonstrate transparency and ethical business practices.”

Main objectives of inquiry

According to Du Plooy, the Competition Commission identified the national fresh produce markets as crucial focal points. These markets play a significant role in price discovery, directly affecting what consumers ultimately pay for produce and what producers receive. 

The main objective of the inquiry is to investigate the entire value chain. It includes the promotion of efficiency, adaptability and development of the economy, the provision of consumers with products and product choices and the detection of conditions in a market which tends to impede, restrict, or distort competition in connection with the supply or acquisition of particular goods or services.

However, they identified three specific areas. These areas are the efficiency of the value chain from the producer to the agent to the end consumer, the market dynamics of key inputs such as fertiliser, seeds, etc and the barriers to entry.

APAC welcomes inquiry

Du Plooy said APAC welcomes the inquiry that might identify any features that may impede, restrict, or distort competition in an industry where APAC exercises regulatory oversight.

“We focus on ethics. We look at the agents to make sure the producer gets what he deserves, that the agent gets his commission and essentially that the consumer at the end of the day pays a fair price for the produce they receive.”

APAC’s goals are strongly aligned with what the inquiry seeks to investigate and the organisation participated in public hearings on 26 October 2023.

“As a regulator, APAC must take action against agents who deviate from the rules. However, agents are the unsung heroes of the fresh produce industry. They play a crucial role in price discovery, ensuring that producers receive fair compensation and that the consumers pay reasonable prices for the produce they take home,” Du Plooy said.

The way forward

The fresh produce industry must be wary of what the possible outcome might be. “The Competition Commission has sharp teeth. Do not wait, participate. Be part of the solution to protect what matters most,” Du Plooy said.

The Commission will make recommendations at the end of the investigation, but they can also make legally binding findings. “Take note of 31 May 2024. This is when the provisional report will be released for public comment and input. The final report will be gazetted on 1 October 2024”. – Hugo Lochner, Plaas Media

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