TRANSFORMATION
AYABONGA CAWE: Food retail inquiry touches on all key contemporary economic debates
The government is failing to deliver on the widening of the retail market and is hindering the progression of small business
Tembinkosi Bonakele and his team at the Competition Commission are quite a busy lot. Every week, one hears of market inquiries from the transport sector, to margarine. No inquiry bears greater significance for the kind of transformation our economy and society needs than the one into the grocery retail sector. As Reena Das Nair of the Centre for Competition, Regulation and Economic Development noted, the grocery retail sector (more so large supermarket chains) is not only a key source of food for many, but also "a key route to market for many suppliers of food and household consumable products". These large retailers are what is called in textbook economics, monopsonies. Not in the strictest use of the term, but the dominance by a few players reinforces the "market situation in which there are only a few buyers". What effect does this have on the supplier industry and the value chain more broadly?How these suppliers get their products to the shelves is one of the issues looked into ...
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