Food prices must be investigated and Fall!

Lobby group Amandla.mobi is calling on big businesses to drop the prices of essential foods. In their campaign petition – addressed to the President, big food business, supermarkets, and the ministers Trade and Industry, Agriculture, and Land Reform and Rural Development – they urge the Competition Commission to investigate the price difference between farm gate and retail store. The commission had announced last year that they were closely monitoring food prices to see if they are harmful to consumers.

“Our food system is broken”

According to the petition, people are struggling to put food on the table, and what people can afford is not nutritious, which threatens their health. The campaign statement declares, “Mzansi has enough food to feed everyone, but the price of food means people go to bed hungry. Our food system is broken.” Since 2022, Amandla.mobi has been building pressure and advocating for the government to increase social grants and to extend the R350 Covid grant into a basic income grant of at least R1,335.

Social grants themselves cannot be celebrated achievements, says the movement as “the cost of living will undermine these victories and keep people in poverty. The R350 is hardly enough to travel to a job interview or start a small business, let alone buy enough food for the month.”

Low income earners decry expensive food

Yandiswa Taho (38) is a single mother from Delft in Cape Town who works under the City of Cape Town’s Expanded Public Works Programme (EPWP). She stays with her 10-year-old son, who benefits from the government’s child grant. “My salary is R2,800 per month, and R2,000 of this goes to groceries. Even this grocery is not enough, it only carries us for almost three weeks. A whole week and some days before month end, we are already scrambling for food, the cupboards are dry. The most expensive food is cooking oil, maize meal, rice, flour, potatoes and these are basic. Because of how expensive they are, I buy cheap brands, which are of less quality because I cannot afford the big brands,” says Taho. The R500 social grant helps to cover her son’s scholar transport.

“I don’t even count the grant to help around the house. I am the sole provider and don’t have support from anywhere else. I don’t even afford toiletries for myself, it’s hard. If I have roll-on and body lotion, I am fine. I cannot afford anything else. I hope they can help us, and cut down on the basic foods, because we are suffering,” she told Elitsha.

She has the added worry that her employment contract with the EPWP programme will come to an end by June and says she will then likely apply for the government’s social relief of distress grant (R350). “I don’t know how we will survive after that, because the way food is expensive I don’t even save money, I cannot afford to. I am basically working for food and nothing else,” she lamented.

Yandiswa Taho, an EPWP worker under the City of Cape Town earns R2,800 a month and spends R2,000 on groceries and the rest goes to transport for work. “I eat low cost and no name brands because good food is expensive,” she says.

“Toiletries, we can’t afford them”

Another consumer who feels that food prices are pushing him to poverty is Ntandazo Xhegolegusha, from Leiden in Delft. He is the only one working in his household, and stays with his partner. He earns just under R5,000 every month from his job as a general worker in a warehouse. “I spent almost R3,000 on food for the two of us. We do groceries for R2,000 for the month, but we know it won’t stretch far. I have to top it up again, mid-month. I still have transport fare for work. A 10kg of rice just cost me over R200 alone. We spend most on starch food, because it lasts a little. Milk is also expensive for cereal. We cannot survive. All of this excludes toiletries, we can’t afford them. I believe there are basic foods we buy repeatedly in a month, I wish the prices could be dropped there,” said Xhegolegusha.

Amandla.mobi says it is time for supermarkets and big food businesses to be investigated. “We need to make sure food prices are fair, especially for products that don’t need any additional processing, like fruit, vegetables, eggs and whole chickens. The Competition Commission has also expressed concern over the wide farm-to-retail spread in prices. We are tired of supermarkets like Shoprite pretending to care for consumers when they can increase their food prices without having to show that the increase is justified. Big businesses have a history of unfair pricing, like how mobile networks were found to unjustifiably charge low-income consumers much more for data,” their petition explains.

Prices going ever higher

In their report, the Competition Commission said, “Mark-ups are added at every point in the value chain until the final price that consumers pay. When input costs increase, firms throughout the value chain are likely to increases prices to maintain their mark-up percentages. This behavior is not inherently problematic from a competition policy perspective. The problem is that when firms have market power, by virtue of their size, events such as natural disasters or supply chain disruptions provide an additional incentive and opportunity to expand their mark-ups and use costs as a cover to also boost their profitability.”

Among the demands made by Amandla, is the reduction of prices on basic necessities and nutritious food. “We call on supermarkets like Shoprite Checkers, Boxer, Pick n Pay and Spar etc, to reduce the gap between supermarket prices and farm gate prices of essential food items such as eggs, meat, milk, fruit, and vegetables also call on businesses that package and process food and basic necessities, like Tiger Brands, Unilever, Parmalat, Clover, Pioneer Foods etc., to do the same. These businesses can afford to do this while paying farmers a fair price and workers a decent wage while still making large profits,” the petition states.

Key data from the March 2024 Household Affordability Index produced by Pietermaritzburg Economic Justice and Dignity Group shows that the average cost of a household food basket is R5,277.93 which this time last year cost R4,966.20, an increase of R311.72 (6,3%). The food items that saw the biggest increases are rice, sugar beans and curry powder. A 10kg bag of rice increased by 24% while sugar beans and curry powder increased by 24% and 21% respectively. This chimes with Statistics SA’s data showing consumer inflation had nudged up to 6% in November last year. While the inflation in the prices of bread, cereal and maize slowed to below 9%, rice shot up by 20.8%.