The Competition Commission has noted that retailers had a tendency of buying loaves of bread at a cheaper rate from manufacturers but failed to pass on the discounts to consumers, charging them almost R5 more for a loaf of white bread.
The commission on Wednesday warned retailers about their involvement in opportunistic pricing, saying prices of certain essential food items like bread and cooking oil have skyrocketed in recent months.
This is contained in the commission's Essential Food Price Monitoring Report (EFPM), which was released on Wednesday.
“As of June 2022, the retail price of a loaf of white bread was R17.41 and the producer price was R12.42, a difference of R4.99. The retail and producer prices of white bread have increased since January 2022 when they were R15.46 and R11.31 respectively.
“The spread widened from R4.16 in January 2022. This indicates that retail prices have risen faster (12%) than producer prices (10%) over this period,” says the report.
It said the retail price of a loaf of brown bread was R15.90 in June 2022 while the producer price was R12.73.
“The resulting spread was R3.18. The respective retail and producer prices of brown bread increased from R13.99 and R11.67 in January 2022. As such, retail prices have increased by 13% and producer prices by 9%.
“This differing degree of price increases between the retail and wholesale prices caused the spread to widen from R2.32 in January 2022 to R3.18 in June 2022, a 30% increase.”
The report added that in January 2020, 750ml of cooking oil cost R21.95.
The cooking oil price surged by 41% to R31.12 in January 2022.
However, the cooking oil price skyrocketed once more between March and June 2022 to R43.96.
“South African consumers may be facing opportunistic price increases of sunflower oil as processor prices have increased by far more than sunflower seed prices this year and retailers have not passed on wholesale cost reductions for bread in the past, resulting in widening retail margins,” reads the report.
The commission’s spokesperson, Sipho Ngwema told Sowetan on Wednesday that the EFPM reports, which the organisation started issuing since the advent of Covid-19, helped it to monitor “if there are prices that have crossed the line”.
“If there are features of prices having crossed the line or people having broken the law, involved in features that are anti-competitive, then we can be able to make follow-ups. We are not monitoring them for the sake of monitoring.
“We have to monitor what is taking place in line with our mandate in order to make sure that if we have to take action, we make an informed decision based on what we have been monitoring over a period of time.”
sibanyonim@sowetan.co.za
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