Are South African retailers using food price inflation to add in a bit extra and increase their profits?
The Competition Commission has both praise and criticism for retailers in its latest Essential Food Price Monitoring Report for August 2022. The report compares producer and retail prices for a variety of products to see whether retailers are pushing up prices unfairly.
Retailers had absorbed some of the sunflower oil cost increases to keep retail prices down, the commission said. Processors had increased their prices by 72% this year, and retailers had passed on only half of that.
However when it came to bread price rises, the commission was undecided – retailers could be passing higher producer costs on to consumers, it said.
Alternatively – and this was where the evidence pointed – they had not dropped prices when costs went down in 2019, and had maintained high prices since then.
The commission said it would continue to monitor food prices and “probe essential food price increases that appear to be abnormal or excessive”. Also, as global food inflation decreased, it would “monitor and assess the transmission of cost reductions to the local market”.