A Regoverning Markets Agrifood Sector Study

by Andre Louw, Davison Chikazunga, Danie Jordaan and Estelle Biénabe

South Africa's national food market, like much in South Africa, is characterised by dualism with a very well developed, highly sophisticated food marketing system on the one hand and a well-organized informal food food marketing system on the other hand. The highly sophisticated food marketing system is dominated by a small number of retail groups who distribute food through a variety of supermarket formats located in the major cities and towns of South Africa. Conversely, the informal food marketing system distributes food through general dealers, cafes, spaza shops, street vendors, hawkers and tuck shops and street corner stalls in areas like townships and former homelands where supermarket retail outlets are absent or have been until now.

The restructuring of the South African food markets is observed through consolidation, trans-nationalization and the emergence and disappearance of supply chain actors. Advanced stages of consolidation are observable in most sectors of the South African food supply chain. They are evident from relatively high levels of concentration observable in food production, processing, wholesale and retailing. Despite reasonably high and rising levels of foreign direct investment in South Africa, inward trans-nationalization into the South African food sector is limited to a few small multinationals. This is, arguably, due to the country's remote geographical position away from industrialised regions.

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