Fourteen fresh produce market agents and association, the Institute for Market Agents of South Africa, have been referred to the Competition Tribunal for prosecution in relation to charges of alleged price-fixing and fixing trading conditions in contravention of the Competition Act, the Competition Commission said in a statement on Wednesday.
This follows search and seizure operations conducted by the commission at the premises of the agents in Pretoria, Johannesburg, Cape Town and Durban, in March.
The agents, which serve as fresh produce market intermediaries between farmers and buyers of fresh fruits and vegetables in South Africa, are alleged to have agreed or engaged in a concerted practice to charge farmers the same commission fee when selling their fresh produce to customers.
The commission’s investigation found the fixed commission fee has been charged to farmers at 5% to 6% for potatoes and onions, 7.5% for all other fruits and vegetables and up to 9.5% for all fruits and vegetables delivered to them by farmers without pallets.
The fresh produce market agents are all members of the Institute for Market Agents of South Africa and the commission notes that the practice of charging a fixed commission fee is enforced by the institute.
In addition, it says, the practice has been in place for over 50 years and is ongoing. The conduct amounts to an agreement and/or concerted practice to fix prices and/or trading conditions and is in contravention of the Competition Act.
The matter emanates from a complaint lodged by the Department of Agriculture, Forestry and Fisheries alleging, besides others, that agents who act as intermediaries between farmers and buyers of fresh produce are involved in anticompetitive behaviour and that previously disadvantaged market agents are not able to compete effectively within the market.
In March, the commission conducted a search and seizure operation at the premises of the different fresh produce markets. It seized information indicating that the agents charge farmers the same commission rate.
The fresh produce market agents who face possible prosecution are: Botha Roodt, in Johannesburg; Botha Roodt, in Pretoria; Suptropico; Interaction Market Services; Dapper Market Agents; Dw Fresh Produce; Farmers Trust; Noordvaal Market Agents; Marco Fresh Produce Agency; Wenpro Market Agents; Wenpro Market Agents, in KwaZulu-Natal; Prinsloo & Venter Market Agents; Fine Bros; and Delta Market Agents.