14 fresh produce market agents & the institute charged for price fixing

12 Oct 2017

The Commission has referred to the Tribunal for prosecution fourteen fresh produce market agents and their association, the Institute for Market Agents of South Africa, in relation to charges of price fixing and/or fixing trading conditions in contravention of the Competition Act.

This follows search and seizure operations conducted by the Commission at the premises of the agents in Pretoria, Johannesburg, Cape Town and Durban in March this year.

The agents, which serve as fresh produce market intermediaries between farmers and buyers of freshly produced fruits and vegetables in South Africa, have agreed and/or engaged in a concerted practice to charge farmers the same commission fee when selling their fresh produce to customers.

The investigation has found the fixed commission fee has been charged to farmers as follows:

• 5% to 6% for potatoes and onions;
• 7.5% for all other fruits and vegetables; and
• Up to 9.5% for all fruits and vegetables delivered to them by farmers without pallets.

The fresh produce market agents are all members of the Institute for Market Agents of South Africa and the practice of charging a fixed commission fee is enforced by the Institute. In addition, the practice has been in place for over 50 years and is ongoing. The conduct amounts to an agreement and/or concerted practice to fix prices and/or trading conditions and is in contravention of section 4(1)(b)(i) of the Competition Act.

The fresh produce market agents who face prosecution are: Botha Roodt (Johannesburg); Botha Roodt (Pretoria); Suptropico (Pty) Ltd; Interaction Market Services; Holding (Pty) Ltd; Dapper Market Agents (Pty) Ltd; Dw Fresh Produce CC; Farmers Trust CC; Noordvaal Market Agents (Pty) Ltd; Marco Fresh Produce Agency; Wenpro Market Agents CC; Wenpro Market Agents (KZN); Prinsloo & Venter Market Agents; Fine Bros (Pty) Ltd; and Delta Market Agents (Pty) Ltd.

Background

The matter emanates from a complaint lodged by the Department of Agriculture Forestry and Fisheries (DAFF) alleging, among others, that agents who act as intermediaries between farmers and buyers of fresh produce are involved in anti-competitive behaviour and that previously disadvantaged market agents are not able to compete effectively within the market.

In March 2017, the Commission conducted a search and seizure operation at the premises of the different fresh produce markets. The Commission seized information indicating that the agents charge farmers the same commission rate.

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