Speaking truth to power has almost become radical chic. Noam Chomsky and Arundhati Roy have argued that ignorance has no part in why the powerful do what they do. Their critique needs a slight nuance to allow for what the powerful choose to deny.
In early January 2025, the Competition Commission published its final report for the Inquiry into the Fresh Produce Market. The outcry was immediate. More significant than the expected outrage from the fresh produce market was that of economists. Even the Daily Maverick’s Ray Mahlaka – “In Defence of Food Retailers in the Private Sector” – was part of the baying pack.
The transparent fiction of “consumer sovereignty” was at the heart of the economists’ attack. Consumer sovereignty is the economists’ equivalent of late 16th century scientific thought about the earth being flat. The (largely) unchallenged understanding of a flat earth — which corresponds to everyone’s experience of their immediate surroundings — is captured by the earliest known map of the world prepared by Urbano Monte in 1587.
The notion of consumer sovereignty — the idea that consumers drive the production of goods and services through their purchasing decisions — is 172 years younger than the flat earth idea but it has still been around a long time, some 266 years, since first introduced by Adam Smith in 1759. Consumer sovereignty is the premise upon which Smith, the economic pope of capitalism, based his theory of free market efficiency and individual choice.
Consumer sovereignty is the basis of Smith’s metaphor of “the invisible hand”; the hand that supposedly directs individual profit-seeking capitalists to act in the public interest accidentally. The metaphor is mostly associated with capitalism’s bible, Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776). It additionally serves as the invisible market force that (allegedly) ensures equilibrium to free market supply and demand, notwithstanding production being the decisions of individuals driven by self-interest.
Its current economic form — neoclassical economics — introduces the new concept of “utility maximisation”, with consumer sovereignty as its explicit premise. It clarifies that consumers are rational agents making decisions to maximise their satisfaction (utility). Businesses thus simply respond by producing what consumers demand.
The fairy-tale of consumer sovereignty is still the foundation of much economics being taught in many universities around the world.
Competition Commission’s Inquiry into the Fresh Produce Market
More particularly, and a measure of its acceptance, is that, although not mentioned, consumer sovereignty suffices as the implicit basis for the Competition Commission’s recent completion of its Inquiry into the Fresh Produce Market.
After an inquiry of almost two years, involving “rigorous analysis” and extensive consultations, the commission made 31 recommendations.
Foremost among them is that supermarkets have been ordered, within a year, to change the way they sell fruit and vegetables to make it easier for consumers to make their expected rational choices.
“The inquiry noted that the majority of prices for fresh produce are not comparable between retailers from the perspective of a consumer. This is mainly because prices are presented on a per-unit basis, and these units are varied across the different supermarkets. For instance, one retailer may sell tomatoes in 3kg bags while another opts for a 1kg or 3.5kg bag. An accurate price comparison by a consumer on a like-for-like-basis is, as a result, more difficult.”
The report further notes that even the inquiry members struggled to accurately compare the prices of fresh produce. This difficulty was concerning because it would affect the average consumer’s ability to exercise their supposed “utility maximisation” for they would have even less access to pricing information than members of the inquiry.
Who is the ‘average supermarket’ consumer?
According to Parks Tau, the Minister of Trade, Industry and Competition: “The fresh produce market holds immense significance for our nation. It is not merely a commercial sector. It is a lifeline for households and a driver of food security.”
This is “our people” speak, the tens of millions living in townships and the rural areas on whose behalf the ANC still thinks it can speak.
But before even getting to them, what about the most privileged 1-5% of our population? My partner and I and most of our friends are probably in this elite group. Yet, besides frequent complaints about how supermarkets obfuscate their prices, I know of no one who goes to the five largest supermarket chains comparing prices before making their purchases. But the whole of neoclassical economics is based on the fabrication that this is precisely what we all do to achieve utility maximisation as rational consumers.
The power of poverty — rather than consumer sovereignty — determines the rational choices of “our people”. This means they can't afford even the choice of regular shopping at supermarkets. Their reality is shaped by the fact that, as the Pietermaritzburg Economic Justice and Dignity Group’s Household Affordability Index shows, a basic food basket in Cape Town costs more than R5,068 a month, while a worker earning the national minimum wage would take home R4,633. This leaves “a household with a budget deficit of just over 45% before costs such as electricity, transport to and from work, data, sanitary and health products are factored in”, according to Dr Gareth Haysom, an urban food systems senior researcher at the African Centre for Cities at the University of Cape Town, and co-author of The State of the City Food System Report of May 2024.
The Mail & Guardian’s Lyse Comins provides a most sobering outline of the City Food System Report. In it, she tells us about Haysom’s call for a systemic approach to solve the urban food poverty problem. The solution for him and his co-author, Jane Battersby, the lead author for the recent Food and Agriculture Organisation’s Committee on World Food Security’s High Level Panel of Experts report: “Strengthening Urban and Peri-urban Food Systems to Achieve Food Security and Nutrition in the context of urbanisation and rural transformation”, lies in recognising the vital role played by informal food vendors.
Comins quotes Battersby’s conclusion: “Supporting the informal sector is essential because it is a major source of food for urban residents,” she said, adding that infrastructure issues such as transport, energy costs and access to clean water and sanitation also shape food security outcomes.
“A clear target could be to ensure all people in urban areas live within walking distance of places selling food, including fresh produce that we need for healthy diets.
“Ideally, we need coordinated solutions driven by a clear vision that will address production issues, distribution challenges, land reforms, town planning, health and sanitation issues.”
Six months later, in November, spaza shops — mainly if not exclusively “foreign-owned” — were blamed for the tragic deaths of a large number of the townships’ poorest children. This accident waiting to happen removed the spotlight on “the consumer’s welfare”, which the final report assured us “both the Fresh Produce Market Inquiry and the retailers regard as vital”. Spaza shops, the lifeline for the townships’ poor, were also buried among the dead children.
This spared the Government of National Unity (GNU) from even explaining why spaza shops would not be built into their urban planning for townships. This is a step the government could never take because it clashes with the GNU-strengthened sacrosanctity of their macro-economic policy of neoliberalism with its gospel of being investor friendly. Protecting the main supermarkets is a beneficiary of this policy.
Neoliberalism makes food affordability, including healthy food, unaffordable luxuries for ‘our people’
Confining myself just to the Daily Maverick for examples of why neoliberalism says “no” to any interference with the purportedly “free market”, we begin with a frequent contributor to the Daily Maverick, Wandile Sihlobo, chief economist at the Agricultural Business Chamber of SA and a senior fellow in Stellenbosch University’s Department of Agricultural Economics. He attributes the success of South African agriculture — yes, the success! — to “a robust private sector” that has been “an integral part of the South African agriculture success” story. An additional “catalyst of growth” has been “progressive trade polic(ies) driving exports”. Foremost among the priorities to ensure that “policy remains favourable for investors and farmers” are that “there are no interventionist trade policies (blocking exports) or price caps and that there is strong protection of property”.
Business Maverick journalist Ray Mahlaka takes Sihlobo’s contribution as given. His explicit purpose is captured in the headline to his article, In defence of food retailers in the private sector. His article’s opening sentence conveys his sense of bewilderment at the Competition Commission’s ignorance of what he takes as basic economics: “Do South Africa’s competition authorities consider normal market and business dynamics when anti-competition and trust matters are under the spotlight?”
This question is shortly followed by the rebuke that: “A reading of the inquiry’s report and some of its bizarre recommendations suggests that competition authorities might not wholly consider market dynamics or take stock of the long-established efforts of these players to promote competition.”
This rebuke is Mahlaka’s response to the commission’s finding that supermarkets use various stratagems to limit competition. According to the commission, the result is that “competition in the formal retailing of fresh produce is not as healthy as it could be”.
Deputy Competition Commissioner and chairperson of the inquiry, Hardin Ratshisusu, was concerned that retailers’ pricing of certain fresh produce revealed instances of high mark-ups over what suppliers are paid. Mahlaka would have none of what he considers to be nonsense. He assures us that the Competition Commission’s five-year-old banning of 30-year long-term exclusive lease agreements, allowing a supermarket chain to be the only seller of specific goods at a mall to protect their turf along with similar other measures, has already been phased out years ago by most property owners and landlords.
Moreover, Mahlaka is quick to point out that the commission couldn’t make a finding on the complaint that large retailers were profiteering from the sale of fresh produce by unfairly marking up fruits and vegetables. To have upheld such a complaint would, in his opinion, have been “controversial” considering that “retailers have been forced to absorb large costs in recent years to maintain South Africa’s food security system”.
South Africa’s food security system
Mahlaka presents these costs — the “billions of rand” to buy diesel to run generators “so that stores would be open during the higher stages of Eskom blackouts, and the many petrol and diesel price increases of the past” — as evidence of large retailers’ recognition of their social responsibility.
What he chooses not to recognise is the report issued by Just Share some four months before his article defending the retailers, titled “New analysis shows extremely large pay gaps in JSE-listed wholesale and retail sector”. Not liking the Just Share revelations, he similarly chose to ignore the full article on the Just Share report, written by Georgina Crouth.
From his seemingly self-protective perspective, his silence was well merited.
Just Share's research shows that:
- The average lowest paid worker in the wholesale and retail sector would need to work for 21 months to earn what an average CEO in this sector earns in one day.
- The average unweighted ratio between total CEO remuneration and total lowest earner’s remuneration is 597. In other words, CEOs in this sector earn, on average, 597 times the wages of the lowest paid workers.
- Woolworths’ internal minimum wage of R93,600 per annum is significantly higher than its competitors, and 57% higher than the 2023 sectoral determination figure of R59,483 per annum. Yet, compared to this R93,600, Woolworths’ CEO was paid R122.5-million in 2023— a vertical wage gap of 1,308.
- The table below provides details of South Africa’s nine largest wholesale and retail companies in 2023.
Some of these enormous salaries come courtesy of the notorious profits of global investors and big agribusiness corporations knowingly sickening people by the promotion of “junk” (ultra-processed) food laced with harmful chemicals and cultivated with the use of toxic agrochemicals. All this has been known for a long time and widely publicised.
A recent article captures this well “Sickening Profits: The Global Food System’s Poisoned Food and Toxic Wealth”. Adding insult to injury, as this article points out, these investors compound their handsome profits from the food industry by also profiteering from illnesses and diseases resulting from the food system governments have allowed them to create. “Free market” governments further allow them to invest in the pharmaceuticals sector. Institutional investors and wealthy individuals have only to sit back and wait for the “free” market and its toxic food system to deliver the combined harvested profits.
There’s a specifically South African side to this sickening story. A Business Day article from January 2025 tells us about a 2024 Unicef study that found South Africa to be one of 20 countries accounting for 65% of all children with severe child food poverty globally, and that 23% of children in South Africa are classified in that category and at risk of life-threatening malnutrition and related health complications.
The study, titled “Child Food Poverty: Nutrition Deprivation in Early Childhood”, notes: “Child nutrition issues are also compounded in South Africa by easier access to cheap, nutrient-poor and unhealthy ultra-processed foods and sugar-sweetened beverages that are aggressively marketed. These unhealthy foods and beverages are consumed by an alarming proportion of young children experiencing food poverty and displace more nutritious and healthier foods from their daily diets.”
One can only wonder whether Mahlaka (should a reminder be necessary, he is just my example of the standard stuff provided by people we are invited to see as ‘experts’) has read Adèle Sulcas’s long Daily Maverick article from December last year — “Unprecedented Lawsuit Against Ultra-Processed Food Companies — Big Food on Trial”. Sulcas is the senior advisor for the Daily Maverick’s “Food Justice” project.
Part of the selective reading — as exemplified by Mahlaka — is what is left out of commentaries on the Competition Commission’s report. Thanks to another Daily Maverick report on the commission, we learn from Ratshisusu, who chaired the inquiry, that “the cross-shareholding by Patrice Motsepe’s African Rainbow Capital in both the RSA Group and Subtropico impedes, restricts and distorts competition”.
The commission accordingly gave African Rainbow Capital six months to either voluntarily divest in one of the two companies or be forced to sell. None of this, of course, inhibits the continuing colour-coding of monopoly capital being “white”.
This attempt by the commission to interfere with the “free market” merits reminding ourselves of Mahlaka’s previously quoted rebuke of the commission: “A reading of the inquiry’s report and some of its bizarre recommendations suggests that competition authorities might not wholly consider market dynamics or take stock of the long-established efforts of these players to promote competition.”
The Competition Commission’s ideological mandate
A mark of a “developed” country is that it has a statutory institution to counter the anti-competitive behaviour of markets dominated by a few giant corporations. This is essential because consumer sovereignty is central to both Adam Smith’s thinking and its development in still dominant neoclassical economics. As we saw at the beginning of this article, capitalism and its whole idea of the fable of a free market derive from the premise of consumer sovereignty. As Adam Smith put it in in his Wealth of Nations of 1776: “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it.”
This wasn’t the case, even in 1776, and it has been increasingly “self-evidently” not the case since the late 19th century arrival of a dominant few companies in each economic sector to turn Smith’s free market into a fiction. This domination has enabled them to restrict output or fix prices so they can achieve a level of profit maximisation unthinkable in a market open to free competition amongst a multitude of small competitors. This condition is now so well established as the new norm that even mainstream economists have given it a name: oligopoly — “A market structure wherein only a select few market participants compete with each other. The competitive dynamics within an oligopoly are distorted to favor a limited number of influential sellers.”
It is so ubiquitous in developed economies that it is also known as monopoly capitalism, which has long been seen by critical economists as the natural dynamic of developed capitalism everywhere.
No sector is exempt from this dynamic, even though oligopoly is its normal form. The social consequence of what is produced, at what price or how it’s marketed is not a consideration. Just think of the price fixing of bread in South Africa or the global price fixing and promotion of pharmaceuticals, including Covid-19 vaccines. Just think of the tobacco industries’ fight against attempts to restrict cigarette sales, or the public spaces in which cigarettes can be smoked.
Oligopolies have indeed been taken as natural by the very state institutions established everywhere supposedly to restore consumer sovereignty. All 31 of the recommendations made by our so-called Competition Commission, after a two-year investigation, are pathetic. Yet it is no different from their global counterparts.
The oligopolies controlling the fresh produce market have lost no time in announcing their intention to challenge their market freedom. Indeed, they are already directly drawing on the tobacco industry’s experience to protect their profits and, as we have seen, economists are already available to be in the vanguard of their counterattack.
While all this is happening, it matters not that millions of South Africa will be paying the price to ensure the nine fresh produce CEOs continue to receive their annual pay package of an average R45-million and that the investors involved are similarly well rewarded.
A recent article in the Mail & Guardian reminds us of the costs paid by millions of South Africans for the ideological illusion of consumer sovereignty. The article, “Food Prices Soar Above Inflation”, provides the most recent statistics about the chilling reality of the millions of South Africans who can’t afford sufficient nutritious food to feed their families.
Even more than the supermarkets that know this is the complicity of our government (like that of most other governments) in not only allowing this to happen but whose policies are purposefully designed to meet the business interests of the chain of companies involved in the food industry. The GNU’s neoliberalism extends way beyond the food industry. Its policy is to make all South African industries globally competitive, while enforcing the socioeconomic fundamentals — especially the finance ones — on even more tens of millions of South Africans who increasingly are forced to face the reality of austerity and the cuts that come with it.
And us?
Where does it all leave us — that is those of us who are no longer prepared just to accept the normality of poverty, unemployment and inequality or the prescriptions provided by neoclassical economists?
The answers are challenging. Mine begin with being part of the growing number of people who are forming together in small groups to further educate themselves so that they can better challenge the government and its economic supporters. At the least, be ready to join the united front that will surely emerge to bring all these groups, including most of organised labour, together. When this happens, we will at least be sufficiently large to make it difficult for the government not to hear us, and, having done so, not drop the steroid-driven neoliberal part of capitalism, as I’ve previously argued in the Daily Maverick.
We have the understanding to defend ourselves from despair. We can learn from Antisthenes, a pupil of Socrates, who advised some 2,400 years ago: “A man must provide himself either wit to understand or a halter to hang himself.” DM
This article is co-published with the journal Amandla!