The Competition Commission said that the 50-year-old practice by fresh produce market agents of charging fixed commissions to farmers amounts to price fixing.

The commission, which carries out investigations into allegations of unfair business practices, said it had referred 14 fresh produce market agents to the Competition Tribunal, after carrying out an investigation into how agents pay farmers. 

The tribunal adjudicates on matters relating to business competition.

The 14 agents, members of the Institute for Market Agents of South Africa (IMASA), face charges of price fixing and fixing trading conditions. 

Not small potatoes

In a media statement, the commission said it investigated the agents, who serve as fresh produce intermediaries between farmers and buyers, following a complaint lodged by the Department of Agriculture Forestry and Fisheries (DAFF).

DAFF’s original complaint noted that previously disadvantaged market agents were not able to compete effectively within the market. 

It said that following an investigation in Pretoria, Johannesburg, Cape Town and Durban in March, it discovered that agents were charging fixed commission fees. 

These were 5% to 6% for potatoes and onions, 7.5% for "all other fruits and vegetables", and up to 9.5% for "all fruits and vegetables delivered to them by farmers without pallets".

The Commission said that that practice of charging a fixed commission fee was enforced by the institute. “In addition, the practice has been in place for over 50 years and is ongoing,” it said.