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Big business grips SA wholesale sector
An alarming concentration of wholesalers in SA markets was revealed on Thursday, 5 June 2008. The worst case is fuel, where six oil giants account for 82% of all petrol and diesel sales. They have the widest profit margin of nearly 6% against SA's average 3.6% wholesale margin.
Big corporations control 96% of the entire fuel wholesale market.
Metals and metal ores is the next most concentrated market, 92% controlled by big business with the 10 largest players holding a 61% market share.
Farmers get more than half of their supplies from the 10 biggest agricultural wholesalers, and grocery chains get more than a third of their food and beverages from six corporations.
Statistics SA's “Wholesale trade industry” report found big companies accounted for 73% of the country's R531-billion wholesale trade in 2005. Small companies made up 19%, and medium sized companies 8%.
More than a fifth of the entire wholesale market was controlled by the biggest 10 wholesalers.
Big business controlled more than half the market in all but two of the 11 sectors that the country's wholesale market was divided into by Stats SA. Small and medium businesses are strongest in “Wholesale trade on a fee or contract basis”, followed by “General and other wholesale trade”.
After fuels, textile and clothes wholesalers were found to have the highest profit margin of 5.8%.
Food and beverages had the lowest average wholesale margin of 0.8%, followed by agricultural wholesalers with 1.6%.
Source: Daily Dispatch
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