The Competition Commission has signed a Memorandum of Agreement with Pick n Pay confirming that the Company has capped its gross profit margin for ginger and garlic for the period covering 28 January 2021 to 1 April 2021.
This period may be extended. The commission hopes this move will formalise similar agreements reached with other national retailers.
In January, the commission received numerous complaints from consumers, alleging certain food retailers had increased the prices of ginger and garlic by more than 300 percent.
The commission engaged with all affected retailers and expressed its concerns. The commission is pleading with other retailers to observe the Consumer Protection Regulations while adhering to the provisions of the Competition Act as amended.
The commission’s spokesperson Siyabulela Makunga, “You will remember in recent months the commission has received numerous complaints from members of the public, alleging that certain Food Lovers, Spar, Shoprite Checkers and Pick n Pay stores, had increased prices for ginger and garlic. The commission expeditiously engaged with all the affected retailers and expressed its concerns that the alleged significant price increases of ginger and garlic in certain retail outlets, could result in contravention of Consumer Protection Regulations.”
Increase in food prices during lockdown
Research conducted by various organisations showed a significant increase in food prices during South Africa’s COVID-19 lockdown last year.
Months into the lockdown, a study by Pietermaritzburg Economic Justice showed that basic food items cost 30% more than they did before.
While this was partly attributed to a disruption to international supply chains and the weak economy, retailers had also been deliberately hiking prices, as found by the Competition Commission.
The commission says even though some prices have somewhat stabilised, consumers are still feeling the pinch.
Director of the Southern Africa Labour and Development Research Unit at the School of Economics at the University of Cape Town, Prof Murray Leibbrandt on food prices:
