Competition Commission investigating essential food prices

South Africa’s Competition Commission said it’s investigating the price of a range of essential-food products, after consumers were subjected to “unjustified increases” over the past two years.

A probe is being conducted into the cost of goods, including bread, cooking oils, corn meal, rice, flour and margarine, the body said in a statement on Tuesday.

That’s after its research showed the retail price of items such as bread increased faster than producer costs of 15% from January to December 2022.

“The food sector remains a priority for the commission as poor consumers spend a significant portion of their income on essential food items,” it said.

“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.”

Food prices rose 14% year-on-year last month, the highest level since April 2009, according to Statistics South Africa.

The findings come as the central bank’s monetary policy committee meets ahead of what is expected to be another interest rate hike of 25 basis points on Thursday.

In January, the South African Reserve Bank raised its 2023 forecast for food-price inflation to 7.3% from 6.2%, with Governor Lesetja Kganyago warning that it could continue to surprise on the upside.

Poultry, egg and agriculture-industry bodies have said power shortages are adding to food production costs.

The watchdog is also probing competition in the fresh produce market.