By: Gina Lodolo & Nicola Taljaard (African Antitrust)
Recent increases in the prices of edible oils have been the focus of news reports. Some retailers have been garnering particular attention for limiting the amount of oil that can be purchased per consumer.
The Chief Economist of the South African Competition Commission (“SACC”), James Hodge, highlighted the price of oil increasing by 42% over a year. This is significant as it reflects 3%-5% of poorer households’ food budget. It has been reported that, although there were already market factors last year affecting the price of oil, the Russia-Ukraine war has certainly exacerbated the situation. Hodge warns, however, that retailers and edible oil companies alike should not unreasonably use the Russia-Ukraine war to raise prices to unjust levels by inflating their price increases more than necessary, thereby seeking to earn ‘excessive profits’.
The SACC will look into the issue more closely. If and when the SACC comes to the conclusion that companies profiteer from their customers, they will act accordingly.
Where costs go up, there may be justifiable increases in prices, however, its recent warning against unjustifiable increases indicates that it will act where prices increase beyond justifiable cost-increase levels. Accordingly, the SACC is considering items that indicate unusual increases, even when taking into consideration the prevailing inflationary environment…
