Competition Commission Scrutinises Pricing Across Basic Food Value Chains

Posted 09 September 2026 Written by Acts Online
Category Trade

Brought to you by SA Legal Academy: The Competition Commission has published its third cost of living report since September 2025, detailing widespread failure by producers and retailers to pass lower agricultural input costs on to consumers across staple food categories.

Acting under the market monitoring and enforcement powers established in the Competition Act, No. 89 of 1998, the Commission noted that producer and retail prices remain detached from commodity cost declines in key consumer sectors, signaling possible margin expansion or anti-competitive pass-through dynamics.

Value Chain Findings Across Key Foodstuffs

The Commission’s surveillance identified specific margin disparities across five basic foodstuffs and municipal services:

  • Brown bread: Retail prices have trended upward since April 2026. The farm-to-producer spread widened to approximately 79% in early 2026 — reaching its highest level since 2023 — despite lower global wheat prices and narrowing farm-to-producer spreads in late 2025.
  • Maize meal: Producer prices rose through late 2025 with only a brief contraction in March 2026, failing to reflect downward price pressure expected from a record domestic harvest and higher seed supply.
  • Sunflower seed oil: Despite a substantial decrease in seed prices starting in April 2026, the farm-to-producer margin remains far above historical averages.
  • Individually quick frozen (IQF) chicken: June 2026 retail prices rose despite stable producer prices and the July 2025 lifting of poultry import suspensions from Brazil following avian influenza outbreaks.
  • Canned pilchards: Retail prices failed to decline in response to lower producer costs following the Department of Forestry, Fisheries & the Environment’s June 2026 increase in the total allowable catch for sardines.
  • Municipal water tariffs: The report incorporated a dedicated review assessing the economic transmission of escalating municipal utility tariffs into consumer living costs.

The Commission confirmed that it will actively monitor these supply chains over the coming months to determine whether elevated margins contravene section 8 of the Competition Act, No. 89 of 1998 concerning excessive pricing or margin squeeze behaviour.

What this means for you, your business, or your clients

  • For yourself: No direct compliance obligations; professionals should account for ongoing staple consumer price pressures when assessing cost-of-living adjustments and personal budgets.
  • For your business: Food processing, distribution, and retail businesses must maintain detailed cost-accounting records demonstrating direct correlations between input costs, logistics, utilities, and final retail pricing.
  • For your clients: FMCG and agro-processing clients face elevated regulatory investigation risk under the Competition Act, No. 89 of 1998 where farm-to-producer or producer-to-retail margin expansions cannot be substantiated by verified overhead increases.

Originally published at https://legalacademy.co.za/news/read/cost-of-living-competition-commission-concerned-about-basic-foodstuff-trends

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