Home » South African regulator urges billionaire-backed ARC to divest fresh produce holdings

South African regulator urges billionaire-backed ARC to divest fresh produce holdings

South Africa’s Competition Commission has called on African Rainbow Capital (ARC), backed by billionaire Patrice Motsepe, to divest from one of the country’s leading fresh produce agencies, citing concerns over anti-competitive practices.

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South Africa’s Competition Commission has called on African Rainbow Capital (ARC), backed by billionaire Patrice Motsepe, to divest from one of the country’s leading fresh produce agencies, citing concerns over anti-competitive practices.

ARC currently holds substantial stakes in both the RSA Group and Subtropico, which together dominate between 50% and 90% of South Africa’s fresh produce markets, controlling key staples such as potatoes, apples, and tomatoes. The commission’s investigation revealed that ARC’s cross-shareholding in these entities distorts competition in an industry largely controlled by just four major agents.

Following a two-year inquiry into the fresh produce sector, the commission recommended that ARC divest from either RSA Group or Subtropico within six months, or face a mandated sale by the Competition Tribunal. The inquiry aimed to address market concentration, promote fairness, and enhance inclusivity in a sector vital to food security.

“The findings highlight the oligopolistic nature of the fresh produce industry, where a handful of agents dominate critical markets,” the commission stated. The report includes 31 recommendations focused on market reform, support for emerging and historically disadvantaged farmers, and addressing systemic inequities.

For ARC, this regulatory push presents a strategic challenge, potentially reshaping its agricultural investments. The outcome could have significant implications for South Africa’s broader efforts to foster competition and equity in key industries, particularly in the face of rising food inflation.

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