The Competition Commission has recommended that the Competition Tribunal prosecute the Institute for Market Agents of SA and 14 of its members on charges of price fixing and/or fixing trading conditions in the fresh-produce market.
The action comes as a result of a complaint by the Department of Agriculture, Forestry and Fisheries on behalf of previously disadvantaged market agents. The department alleges that agents who act as intermediaries between farmers and buyers of fresh produce are involved in anticompetitive behaviour, preventing previously disadvantaged market agents from competing effectively.
The commission said on Wednesday its recommendation followed search and seizure operations by the commission at the premises of the agents in Pretoria, Johannesburg, Cape Town and Durban in March.
It said the agents had either agreed to or had engaged "in a concerted practice to charge farmers the same commission fee when selling their fresh produce to customers".
The commission said the institute enforced an arrangement among members to pay fixed fees to farmers, thus compromising competition. The agents named in the charges are all members of the institute.
The institute was founded in 1945 as the official organisation to represent market agents in SA. It is a section 21, nonprofit organisation and its membership is voluntary, though it represents its members at various institutions, such as the government and Agricultural Produce Agents Council, according to the institute’s website.
The commission’s probe has found that a fixed commission of 5%-6% is charged to farmers for potatoes and onions, 7.5% for all other fruit and vegetables, and up to 9.5% for fruit and vegetables delivered to them by farmers without pallets.
The institute had not responded to a request for comment at the time of going to press.