Supermarkets 'must confess'

Cape Town - The Competition Commission hopes this week to start talking to retail groups about the abuse of market strength and food price-fixing.

Tembinkosi Bonakele, deputy commissioner of the Competition Commission, says it is an ongoing challenge to connect prices seen on the shelves of stores with production prices: the price of bread continues to rise despite falling flour and wheat prices.

He told the portfolio committee on agriculture that regulation would have to be introduced to the agriculture and food markets.

An investigation into the conduct of supermarkets was recently announced and Bonakele expressed the hope that supermarkets would use this opportunity "to confess" what they had been doing.

After the commission's investigation a decision will be taken as to whether the Competition Tribunal needs to hear the matter, he said.

The inquiries should be completed by the end of 2010.

"However, I hope we are able to change their [the retail groups?] behaviour before then - it is not simply a matter of a 10% fine [of their turnover]," Bonakele informed the committee.

Complaints were submitted by the Milk Producers Organisation (MPO) because producers' litre price of milk is so much lower than the shelf price.

Issues being investigated are the strong purchasing power of supermarkets and whether they are forcing producers out of the industry.

Certain marketing practices, such as who gets the best shelf space, are also being examined.

- Sake24.com

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