Govt warns against profiteering as food prices jump | Fin24
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Govt warns against profiteering as food prices jump

Apr 22 2016 16:42

Cape Town – The Minister of Agriculture, Senzeni Zokwana on Friday warned businesses suspected of profiteering from a drought by raising the prices of staples such as bread would face the wrath of competition authorities.

The worst drought in a century has seen food prices soar, affecting millions of mainly black poor in the country, which faces a local government election in August seen as a test for beleaguered President Jacob Zuma.

"I agree we need to find formulas that makes sure... nobody misuses the drought and suddenly, before there are shortages, begins to hike prices. We cannot rule out the Competition Commission coming on board," Zokwana told a media briefing.

"We have taken note of the view that in the baking area people are charging very high prices; we will have to look at that so that we can be able to deal with those things."

The South African Reserve Bank (Sarb) has warned that higher food prices posed a risk to inflation, which stood at 6.3% in March compared with 7% in February, the highest in nearly seven years.

Consumer rights groups have written to the finance and trade ministries demanding action to curb bread price rises.

"What we are witnessing is a pattern of profiteering in the basic food manufacturing sector that is now causing untold suffering to our most vulnerable citizens," said the Consumer Action Network and the South African Food Sovereignty Campaign.

The NGOs said some firms had raised prices by up to 30% over the past six months.

This year's local elections pose a major risk for Zuma's dominant ruling African National Congress, which is facing a strong challenge from opponents seeking to capitalize on what they see as the president's missteps.

Zuma survived an impeachment attempt earlier this month over concerns that he breached the constitution and is also facing mounting concern about weak economic growth.

economy  |  food prices  |  drought


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