President Cyril Ramaphosa has urged South Africa’s major retailers—including Shoprite, Pick n Pay, Woolworths, SPAR, and Massmart—to intensify their price transparency initiatives and help stabilize food prices. In his weekly address to the nation, Ramaphosa emphasized that food affordability is central to the Government of National Unity’s (GNU) mission to fight rising living costs.
Understanding the Factors Causing Food Inflation
Ramaphosa said that despite a national effort to control inflation, factors causing food inflation—such as higher energy costs, transport disruptions, droughts, and global supply chain challenges—continue to push food prices upward. Although headline inflation eased to 3.3% in August, food inflation remains persistently high, burdening millions of households.
He acknowledged that food insecurity still affects a large number of South Africans, particularly low-income families struggling to afford nutritious meals. The president urged retailers to expand affordable product lines and maintain price transparency initiatives to protect vulnerable consumers.
Retail Giants’ Role in Food Security
Ramaphosa highlighted that the majority of South Africans rely on supermarket chains for their daily food needs. “The private sector has a vital role to play,” he said, encouraging the retail industry to prioritize affordable protein, fruit, and vegetables alongside staple goods.
He recognized the ongoing efforts of some retailers to keep prices low and ensure essential items remain within reach. Yet, he insisted that broader cooperation is necessary, emphasizing price manipulation regulations to prevent unfair price hikes.
Cracking Down on Price Manipulation and Cartel Behaviour
Ramaphosa condemned unethical practices in the private sector, pointing to several Competition Commission findings that revealed instances of price-fixing and market collusion. These investigations exposed bread, milling, and poultry cartels, as well as anti-competitive behaviour that directly fuels factors causing food inflation.
In early 2025, the Commission secured a R1 million settlement with an edible oils producer found guilty of price fixing. It also identified the “rocket and feather” effect, where prices rise quickly during crises but drop slowly when production costs fall—creating market “stickiness.”
The Commission’s analysis showed that items such as eggs, chicken, brown bread, and sunflower oil often exhibit widening profit margins despite lower producer costs. Such patterns underscore the need for stricter price manipulation regulations and transparency to prevent exploitation of consumers.
The Government’s Own Pricing Challenges
While Ramaphosa criticized private-sector behaviour, critics point out that government actions have also influenced food prices. Earlier this year, the ANC-led GNU proposed raising VAT to 17%, a move that could have intensified inflation. The measure was later scaled back to 16% and temporarily halted by court intervention after opposition from the EFF and DA.
Economists argue that addressing factors causing food inflation requires a collaborative approach between policymakers and the private sector, built on accountability, supply chain reforms, and sustainable price transparency initiatives.
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This story was first reported by BusinessTech. Read the full article here.
