According to the Commission's latest Essential Food Pricing Monitoring (EFPM) report for 2021 to 2022, there were unjustified price increases of sunflower oil, and white and brown bread, and opportunistic price increases in maize meal. Key trade policy decisions also affected the price of poultry products in 2022, the Commission said.
"The food sector remains a priority for the Commission as poor consumers spend a significant portion of their income on essential food items. As food inflation remains elevated and load shedding continues to affect business operations, food price monitoring will remain a priority for the Commission given its importance to the welfare of South Africans," the competition watchdog said.
This is the eighth EFPM report since 2020, and the latest edition includes the following findings:
The latest EFPM report includes a special focus on the feed-to-poultry value chain, specifically individually quick-frozen (IQF) chicken products. The Commission said that feed costs account for more than two-thirds of broiler production costs and are therefore a source of upward cost and pricing pressure throughout the poultry value chain.
"The feed-to-poultry value chain is highly concentrated with five firms making up 70% of total chicken production and the top two firms making up 50% of the market," it noted.
Some of the report findings in relation to the poultry value chain include:
The report also noted that when chicken imports from the European Union were banned in response to the avian flu outbreak, domestic producer prices increased. "This anomaly requires further interrogation, and the Commission will closely monitor the developments in the poultry sector to ensure that consumers are not subjected to unjustified price increases," the organisation said.
The Commission stated the EFPM reports to date have pointed to concerning features in several food markets and value chains. Examples include larger differences between what farms get paid for food items and in-store prices, growing margins at the processor and retailer level, and potential opportunistic pricing behaviour for staple food products such as bread and cooking oil.
This includes the Commission’s August 2022 analysis of steep prices for sunflower oil throughout the value chain. Therefore, the Commission is investigating the price of a range of essential food products (bread, cooking oils, maize meal, rice, flour, margarine, and pasta) at the retail and wholesale levels.
The Commission also recently launched a Fresh Produce Market Inquiry to assess if there are features in these markets that impede competition.