Competition watchdog slams Motsepe-backed firm
A South African antitrust regulator recommended that African Rainbow Capital, backed by billionaire Patrice Motsepe, divest from one of the country’s largest fresh agricultural produce agencies because it is impeding competition.
African Rainbow holds significant stakes in the RSA Group and Subtropico, which the Competition Commission said jointly control between half and 90% of South African markets that sell staple fruit and vegetables such as potatoes, apples, bananas, onions and tomatoes.
“The inquiry finds that African Rainbow Capital’s cross-shareholding in the RSA Group and Subtropics impedes, restricts or distorts competition,” Hardin Ratshisusu, the Competition Commission’s deputy commissioner, said at the release of the panel’s final report into the fresh produce market on Monday following a two-year probe.
While the commission will recommend to South Africa’s Competition Tribunal that African Rainbow Capital be forced to divest its shareholding in either of the two agents if necessary, the investment firm should be given six months to voluntarily dispose of its interests, he added.
The commission noted that South Africa’s fresh produce industry is distorted despite it having a sizable number of agents, because a limited number of them wield significant control.
That effectively makes the industry an oligopoly, with just four agents controlling the essential fruit and vegetable markets, it said.
The regulator made 31 recommendations to address anticompetitive behavior and promote fairness and inclusivity in the industry in its report.
They focused on encouraging policy and market reform and ensuring there is targeted support for emerging and historically disadvantaged farmers.
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