Probe on collusion welcome

The council was quoted as saying it would make a recommendation to the minister of agriculture to request the investigation, which should focus on the “dominating” role retailers had in their relationship with farmers and food producers.

Whitey Basson, CEO of Africa's largest retailer, Shoprite, said on Tuesday, 26 May 2009, he welcomed such an investigation because it would lay to rest suspicions that retailers colluded with suppliers, in particular agricultural producers and food processors.

“The Shoprite Group will welcome an investigation by the minister of agriculture so that all stakeholders, especially consumers, will have a clear picture of the situation,” he said.

“Shoprite is on the side of our customers and our only concern is to negotiate for the best prices on behalf of the 55-million people who frequent our 1068 supermarkets annually.”

Pick n Pay, which early this year hauled suppliers to a meeting to discuss concerns about the spate of price increases, was equally unfazed by the prospect of scrutiny of its relationship with suppliers.

But finance director Dennis Cope pointed out that the supply chain in SA was so restricted that it significantly reduced the buying power of retailers.

“It's very competitive out there and no one in the retail industry is a price setter. Certainly, negotiations with suppliers are extremely robust but there are few instances where a retailer could refuse to deal with a major supplier on the basis of price alone.

“It should also be said that many suppliers have been hit by historic high input costs and the lag effect is still present,” Cope said.

Basson said although prices were ultimately determined by the laws of supply and demand, Shoprite was always striving to source products at the lowest possible prices.

Source: Business Day

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