South Africa’s Competition Commission is going to monitor food value chains to understand why retail prices have remained high despite cost pressures easing.
The commission’s spokesperson, Siya Makunga, spoke to Cape Talk following the release of a report in which the commission said prices that had gone up like a rocket were coming down like a feather.
The commission noted that retailers seemed slow to drop prices following fuel price drops, the ending of power cuts and bird flu outbreaks, and favourable movements in the rand/dollar exchange rate.
All these had been cited as reasons for higher prices, but all these cost drivers had eased, Makunga said.
“We are quite worried that prices remain high despite the easing of input costs. This is happening at a rate that is not affordable for low-income households.”
Asked what the commission could do beyond giving retailers “a tap on the wrist”, he said the commission would try to understand the justification for the slow reduction in prices.
They would request information from value chains in the essential foods they had been monitoring – sunflower oil, brown bread, canned pilchards and individually quick frozen (IQF) chicken portions.
The commission wanted to “get to the bottom” of why retailers had been very slow to pass on price reductions to consumers, he said.
