The South African Human Rights Commission is considering using its statutory powers to subpoena executive leadership from major retail chains following widespread backlash over their physical absence at the recent National Investigative Hearing into South Africa’s Food Systems.
The second leg of the inquiry, held over four days in Johannesburg recently, was designed to interrogate private sector giants on market concentration, rising food costs, and commercial barriers. However, the decision by corporate supermarket executives including Shoprite, Pick n Pay, Spar, and Woolworths to skip live oral testimony highlighted a structural crisis facing small businesses, specifically corporate gatekeeping that systematically locks small, medium, and micro-enterprises out of mainstream supply chains.
For emerging Black-owned farmers, rural agricultural cooperatives, and boutique food manufacturers, South Africa’s food sector is dominated by a tight oligopoly where four major retail groups control over 70 percent of the formal grocery market.
Following intense protest action outside the venue by civil society coalitions including the Union Against Hunger, amandla.mobi, and the Food and Allied Workers Union, Inquiry Chairperson Sandra Makoasha confirmed the commission is assessing whether to issue formal subpoenas under Section 15 of the SAHRC Act to compel retail CEOs to account under oath for their procurement and pricing practices.
How margin squeezes crush small suppliers
A central focus for small enterprise advocates at the hearings was the deep disconnect between what corporate retailers pay small agricultural suppliers at the farmgate and the prices charged to consumers at till points.
Advocacy group amandla.mobi, which presented evidence backed by over 20,000 signatures demanding itemised pricing transparency across supply chains, emphasised that market concentration creates a double-sided trap for small businesses.
Founding director Koketso Moeti told the commission that profiting from hunger is not a smart investment, pointing out that without transparent pricing data, dominant supermarkets can inflate retail markups while squeezing small, independent farmgate suppliers on price.
Primary producer associations corroborated this margin squeeze. In sworn testimony, Grain SA Chief Executive Officer Dr. Tobias Doyer revealed that less than 20 percent of the final retail price of a standard loaf of bread actually reaches the wheat farmer.
The remaining 80 percent or more is absorbed post-farmgate across milling, processing, packaging, logistics, and retail markups. Doyer told commissioners that farmers cannot be held solely responsible for consumer food prices, stressing that while small-scale agricultural enterprises absorb volatile input costs and climate risks, downstream corporate retail margins remain rigid, leaving negligible profit margins for emerging agri-SMEs attempting to scale up.
Although Shoprite executives did not appear in person for live questioning, their 31-page written submission was formally entered into the official record by SAHRC Evidence Leader Professor Stephen Devereux. While defending its affordability initiatives, Shoprite’s filing explicitly acknowledged that small-scale, Black-owned, and youth-owned agricultural SMEs face immense, systemic hurdles breaking into formal commercial supply chains.
The retail giant cited prohibitive compliance costs, lack of working capital, transport logistics, and rigid corporate volume requirements as major obstacles that regularly prevent small regional suppliers from securing national shelf space.
For small business owners, written admissions without live cross-examination fail to address practical operational barriers, such as 60-to-90-day payment terms and uncompetitive listing fees that routinely push cash-strapped SMMEs into insolvency.
Policy solutions to unlock retail access for SMMEs
To prevent retail concentration from permanently stifling small business growth and regional enterprise development, industry analysts and small-business advocates are pressing for concrete policy intervention. Key measures being demanded include statutory requirements forcing national supermarket chains to publish itemised cost breakdowns from farmgate acquisition to till point, stopping predatory pricing that undermines small local producers.
Furthermore, advocates are pushing for ring-fenced procurement targets requiring major retailers to allocate a fixed percentage of shelf space to local, regional, and Black-owned SMMEs. Other critical demands focus on statutory 30-day payment caps on settlement cycles for micro-enterprises to protect small business cash flows, along with state and private investment in regional agri-parks and aggregation hubs so smallholder farmers can pool produce and enter formal commercial markets without relying entirely on mega-retail supply chains.
As the SAHRC evaluates its legal options regarding formal subpoenas, the outcome of the inquiry will signal whether South Africa’s retail supply chains will finally be opened up to give emerging SMMEs fair market access and sustainable growth opportunities.
