Dominance of SA’s fresh produce market lies at the heart of a dispute that has reached the highest level of the country’s competition-law system.
The Competition Commission wants African Rainbow Capital (ARC) to sell its interests in two major fresh fruit and vegetable market agencies, RSA Group and Subtropico.
ARC challenged the directive in the Competition Appeal Court, arguing that the commission had exceeded its authority.
The Appeal Court agreed, ruling that the commission had no power to order the sale, leaving the matter to be pursued through the Competition Tribunal, which is scheduled to hear the case on Thursday.
The commission’s two-year Fresh Produce Market Inquiry found that the sector was highly concentrated, with the four largest agents accounting for at least 70% of sales of essential fruit and vegetables in major national markets. In Johannesburg, the four largest agents accounted for 81% of sales by value; in Durban, they accounted for 100%.
The leading players include ARC-linked RSA Group and Subtropico, as well as Grow Group, Dapper Market Agents and Prinsloo & Venter.
The inquiry found that RSA Group and Subtropico together accounted for between 50% and 90% of sales in major markets for selected essential produce, including potatoes, apples, bananas, onions and tomatoes. The proportions varied by market and commodity.
The commission was concerned that ARC’s cross-shareholdings in the two agencies could reduce their incentive to compete with one another in an already concentrated market.
Among the remedies proposed in the inquiry’s final report, published in January 2025, was a direction that ARC sell its entire shareholding in either Subtropico or RSA Group -- also known as Interaction Market Services Holdings -- to a historically disadvantaged person, or firm wholly owned or controlled by historically disadvantaged people, and independent of ARC and the existing shareholders.
In its judgment, delivered on March 31, the Appeal Court agreed, but distinguished between the commission’s power to investigate markets and recommend remedies, and pointed out it is within the Tribunal’s authority to make an order directing a divestiture.
The court said the commission’s directive, on its plain reading, amounted to a threat to ARC if it refused to sell. It should instead have referred its recommendation to the Tribunal, the court found.
It declared that only the Tribunal could order the divestiture and ruled that, pending the Tribunal’s final determination, ARC was entitled to deal with its shareholdings in the two businesses as it saw fit.
The commission was ordered to pay ARC’s legal costs.
The judgment did not decide whether ARC’s investments should ultimately be sold or whether the commission’s concerns about competition were justified.
Those questions remain for the Tribunal to consider. Thursday’s hearing is therefore a further step in the process, not confirmation that ARC will have to sell either investment.
ARC, as well as the Competition Commission and Tribunal, were approached for comment on Monday. They had not commented by print deadline on Tuesday. -- DD business desk
