No price fixing found in SA supermarkets

2011-01-28 00:00

AN investigation into South Africa’s major supermarket chains, sparked by rising food prices, has found that they did not fix prices or abuse their buying power by placing onerous demands on suppliers, the Competition Commission said yesterday.

The supermarkets — Pick n Pay Stores, Shoprite/Checkers, Woolworths Holdings, Spar Group, Massmart Holdings and Metcash — will, however, still be investigated for long-term exclusive lease agreements, which the commission says could be anti-competitive and detrimental to smaller supermarkets in certain markets.

As part of this investigation, the commission will “engage” property developers and banks, it said.

The commission said it has finished the first part of its investigation — which relates to food prices, in particular poultry, bread, maize meal, milk, fats, oils and canned fish — but found insufficient evidence to show that the retail chains had abused their buying power, colluded on product placement or exchanged information.

The commission said concerns had been raised with it about the demands on suppliers, especially small ones. These included claims that the supermarkets wanted exclusive supply agreements and discounts.

“No evidence was found to suggest that supermarkets were abusing their buyer power in contravention of the Competition Act,” the commission said.

While it is concerned about the entry of smaller suppliers to the market, the commission said that larger suppliers “considered their relationship with supermarkets to be equal or tilted toward the retailers”.

They were also let off the hook on price collusion.

“The commission could not find evidence of collusion on pricing of the food items it isolated for investigation between the retail chains. These are high-volume and low-margin items across the retail chains. Supermarkets use low prices on these items to attract consumers on a regular basis,” it said. Exclusive leases in local markets are, however, not justified as they could allow supermarkets to dominate in some markets, the commission added. — Fin24.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.