By: Manyane Manyane - IOL

Retailers have been criticised for keeping essential food items prices high despite production costs continuing to decline.

The South African Federation of Trade Unions (Saftu) and the General Industries Workers Union of South Africa (Giwusa) condemned and criticised retailers who kept the prices high.

Saftu said the profitability of South African retailers, extracted from the working class both as workers through low wages and as consumers through high retail prices, was reflected in the exorbitant earnings of the retail executives.

On the other side, Giwusa said the retailers continued to exploit the poorest through slave wages and exorbitant retail prices to keep buying power in their hands.

This was after the Competition Commission raised concerns about the retailers’ slow response in reducing food prices in several essential food value chains.

The commission’s Essential Food Price Monitoring Report (EFPM) indicated that consumers were not benefitting from the potential savings in essential food items.

The report found that despite lower farmgate prices for wheat, the price of brown bread had increased over the period under review. It also found that despite the falling costs in the production of sunflower oil, prices on store shelves had not shown a corresponding decrease.

This has led to suspicion that retailers could be exploiting the spread between input costs and retail prices to rake in profit.

Both Saftu and Giwusa said this showed retailers were in profit.

Just Share’s recent report in September showed the earnings gap between an average retail worker and the top executives of the major retailers. The report revealed that the chief executive for Woolworths’ store earns R123 million annually – a staggering 1.308 times more than the lowest-earning worker.

Shoprite chief executive pockets R65 million a year, which is 1 000 times more than the lowest earning worker. The Spar Group chief executive is making R25 million – 416 times more than the lowest-earning worker.

Saftu general secretary Zwelinzima Vavi said the working class was under siege and its living standards were assailed from all directions.

“At the point of production, the working class is assailed through precarious and insecure working conditions on pitiful wages, while as consumers, it is at the mercy of giant retailers whose lust for profits knows no bounds.

“Moreover, in addition to low wages and high retail prices on essential food items, there is a generalised attack on the social wage through the government’s budget cuts administered by the National treasury,” Vavi said.

Vavi said the government, consistent with the neoliberal dogma to which it was fully committed, was bent on budget cuts in social spending areas as crucial as health and education.

He said this was a furtherance of the attacks on the social wage and, thus, on the well-being of the working class.

“These cruel cuts are administered in a country in which the majority of the country’s population relies on public services. In health, for instance, over 84% of the public relies on public health care.

“State-owned entities, whose role ought to be to power the country's developmental aspirations, are on course to be sold to the private sector, and their services will be rendered at a profit to the majority of the poor working class,” he said.

The Pietermaritzburg Economic Justice and Dignity Group (PMEJDG) recently released a report showing that the cost of living was on a constant hike, and the minimum wage averaging R4 633 could not afford a nutritious food basket for a family of four, as the basket now costs upward of R5 000.

Giwusa president Mametlwe Sebei said this undoubtedly left the working class uncertain and wondering where their next meal would come from.

He said the working class suffered financial attacks in the form of high food prices, high fuel and electricity prices, exploitative municipal rates and school fees, among other things, versus the “slave wages” they are subjected to.

“We need to get the food monopolies under the democratic control and ownership of the poor and the working class so that they serve the interest of the broader society and not just those of the selfish capitalist class which only cares about gaining profit through exploitation, through high retail prices and slave wages to their employees,” he said.

He said the Competition Commission’s report also vindicated their position had been right all along, that food monopolies were responsible for higher prices and profiteer from the starvation hunger and misery of the working class.

“The cost of fuel, being the main contributor has been on a decline for five months now and the currency exchange rate between the rand and the dollar has eased in favour of the rand and power cuts have not been as rampant of late, nonetheless retailers ignore these but will sure be quick to hike prices if the conditions change,” Sebei said, adding that the government and the working-class need to step up and stop the private sector establishments from being the law unto themselves.

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