The Competition Commission said South Africans were paying more than they should be for certain food items even though inflation had come down significantly.
This was one of the key findings in the commission’s latest essential food pricing monitoring report.
In the report, which was released on Wednesday, the competition watchdog noted that, while inflationary pressures had eased, consumers were still feeling the pinch of high food prices. Meanwhile, retailers continued to grow their profits.
The commission’s spokesperson, Siyabulela Makunga, said this was called a “rocket and feather” effect, which caused prices to shoot up quickly but come down very slowly.
“Something called the rocket and feather effect is whereby markets realise rapid increases in input costs due to volatility and inflation and when such costs come down, consumers do not necessarily enjoy a significant reduction in return prices. In this report, the commission has observed that whilst overall inflation has come down, food inflation remains at nearly twice the inflation rate for all goods and services.”
Makunga said the commission would be monitoring the cost of essential food and prices throughout the value chain to see whether consumers were being harmed by the state of competition throughout food value chains.