Competition Commission report confirms rising cost of food crisis
29 March 2023
Last week, StatsSA unveiled a disquieting 7.1% increase in inflation. A closer examination of the numbers exposes a far more distressing reality: food prices have surged even more, and the food price crisis continues unabated.
The Essential Food Pricing Monitoring (EFPM) report released yesterday substantiates this, highlighting that basic and essential food items have seen steep price increases in the past year. The investigation scrutinized the prices of essential food products such as bread, cooking oils, maize meal, rice, flour, margarine, and pasta at the retail and wholesale levels.
From January to December 2022, white and brown bread retail prices rocketed by 20% and 19%, respectively. The price of maize meal surged by 32%, jumping from R26.62 to R35.29. These steep price hikes hit poor and vulnerable South Africans the hardest.
The upward spiralling cost-of-living is the direct result of the ANC's disjointed economic policies that obstruct economic growth. In times of inflation, market friendly fiscal policies are necessary to cushion the impact of rising prices, yet the government continues to neglect, or even mention, the cost of living crisis.
While ensuring there is no collusion and manipulation by retailers and producers, the South African government must provide the infrastructure necessary for businesses to thrive. The ANC government has failed in this regard, as food inflation remains elevated and rolling blackouts continue to disrupt business operations. These are the consequences of a government that has failed in implementing effective fiscal policy, and this failure is a significant contributor to high food costs.
The DA has a clear strategy to alleviate pressure on vulnerable households. We call on the government to immediately consider expanding the zero-VAT rated food basket to include essential items such as bone-in chicken, beef, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, coffee, and soup powder. Dropping VAT on these items disproportionately impacts the poorest 50% of South Africans, who are already struggling to put food on the table. Scrapping the fuel levy is affordable and would immediately lower the price of petrol, the cost of transport and food prices.
We will ramp up the pressure on the government to implement workable economic policies that will steer our economy towards growth and urgently address the cost of living crisis. In 2024, the DA will unseat the ANC government and create an environment that fosters both consumer and business-friendly conditions.
Issued by Dion George, DA Shadow Minister of Finance, 29 March 2023
