Consumers getting ripped off on food

Chief economist of Economists.co.za, Mike Schussler, told the National Consumer Forum in Midrand on Friday, 19 June 2009, that food prices are still increasing around 10% at the consumer level.

He said the investigation into bread prices by competition authorities was thus a positive move.

"When the farmer puts his price down at the gate he sometimes gets paid a lot and sometimes less, but he has risks.

"And then this factory adds value but we hardly ever see decreases, it keeps very high profit margins, and then when it leaves the factory gate we see another profit margin," said Schussler.

"I think we are getting to a similar situation in food prices as it is for municipalities but I don't have all information," said Schussler.

Schussler had just spoken strongly about how consumers are also getting fleeced on electricity prices as industry and internationals pay below cost but consumer charges have quadrupled.

Municipality profit margins on sales of electricity and water are also not far off 100% on average, his research showed, but yet an increase of 34% is being sought that would mainly hit residences again.

Government, via Justice Minister Jeff Radebe and the Department of Trade and Industry, had just spoken at the Forum, which zoned in on placing consumer issues on the national agenda.

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