Briefing the media, Minister in the Presidency Khumbudzo Ntshavheni said ‘Cabinet has approved that the Economic Cluster must put in place an action plan on food prices, food security and access to food’.
This follows after the recent release of a report by the Competition Commission that said big retailers were quick to raise prices in times of economic distress but slow to drop them once pressures subsided.
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Ntshavheni said the Competition Commission has been monitoring essential food prices pursuant to price gouging concerns raised since the declaration of the State of Disaster in March 2020, during the height of the Coronavirus panfemic.
The aim is to ensure affordable and accessible essential food items for consumers, she said.
The commission has observed a pattern where prices rise quickly but fall slowly, and it has identified the concentrated nature of the food and retail markets as a significant factor.
‘The commission has noted the “rocket and feather” effect, where prices are quick to rise often in excess of cost increases and slow to fall once cost pressures decline,’ said Ntshavheni.
‘It has also flagged the concentrated nature of the food and retail markets as a concerning contributing factor.’
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While it remains to be seen when said plan will be put together and implemented, Cabinet has acknowledged the Commission’s recommendations, including market inquiries to address issues contributing to high food prices and limited competition, she said.
Ntshaveni said Cabinet would be implementing the recommendations from the commission on imposing stricter measures and fines against price gouging.
She added that Cabinet was also looking at addressing the structural features in the market that led to high food prices and low levels of competition.
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