Pick n Pay caps profit on ginger and garlic

Garlic and ginger have become more expensive over the past few months due to the market forces of supply and demand.

More consumers started buying garlic and ginger to “treat” the symptoms of Covid-19 during the second wave of the pandemic and they were not happy with the higher prices.

The Competition Commission has now welcomed Pick n Pay signing a memorandum of agreement with the commission to cap garlic and ginger prices. The retailer has capped its gross profit margin for ginger and garlic as essential food items from 28 January to 1 April 2021.

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During this time, Pick n Pay also undertook:

• Not to increase its corporate stores’ gross profit margin on these products;
• To request all its franchisees in writing to price no higher than the corporate store price on these products, and
• In the event that the cost price of ginger and garlic remain materially above the pre-Covid 19 seasonal norms at the end of the commitment period, to extend the stipulated period for a further period of four weeks.

Consumers earlier claimed that some branches of Food Lovers Market, Spar, Shoprite Checkers and Pick n Pay had increased the prices of ginger and garlic.  The commission engaged with the affected retailers to express its concern that these claimed price increases could contravene result consumer protection regulations and other relevant provisions of the Competition Act.

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The commission did not believe increased demand warranted the large increase in absolute margins seen in some instances.

According to the commission it will continue to call on retailers to observe the consumer protection regulations and it hopes to formalise similar agreements reached with other national retailers.

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