"Members of the Institute are the custodians of the Commission Model System where we discover price in real time at South Africa's Fresh Produce Markets, there are now great opportunities for the rest of Africa as well, basically this model allows for a good sustainable balance between growers and consumers," explains Grant.
There are 23 national fresh produce markets which are represented by the Institute, currently the industry is worth around 14 billion Rand and there are around 100 market agents who apply their trade nationally.
"South Africa went through deregulation 20 years ago and our unique system has been inherited from that era. We have been re-positioning ourselves in the industry over the last few years. Fresh produce markets serve as price referencing points with buyer stakeholders now seizing new buying and selling opportunities between markets in regional locations, for example some wholesalers will buy in Jo'burg and truck it down to Cape Town."
Market agents procure directly from the growers and sell via the commission model, where from a wholesale point of view they also engage with farmers and as middlemen would charge a fixed price factoring in their margin.
Since deregulation everything has opened up; its open and the competition is fierce. According to Grant, the commission model is designed to ensure the long term sustainability of industry provided the integrity of the system is upheld.
"Most of the big retailers have their own integrated supply chain and don't buy from the markets as a first choice, Fruit and Veg City (and others) do support the markets as well as having an integrated supply chain. It is all about putting in structures, the good thing about the markets is that we are strategically located, we have everything from informal traders to formal buyers. This entails a whole host of buyers which congregate at fresh produce markets and allows the growers a trusted outlet," says Grant.
The institute has, over the last three years been very active in marketing, Grant admits there was a period of decline because they were not doing enough marketing.
"If you think about it there is a sustainable advantage, we are already there, we already have good infrastructure which is also being improved through Project Rebirth. There are of course difficulties, we have a lot of red tape here in South Africa, but I have seen that with privatisation and changing rules, changes can happen a bit quicker and if Government would just buy into us a bit more and see our relevance, see that they need to up grade certain aspects of our infrastructure we can make this a low cost distribution centre."
The institute has, over the last three years has been very active in marketing, Grant admits there was a period of decline basically because they were not doing enough marketing.
"If you think about it there is a sustainable advantage, we are already there, we already have good infrastructure which is also being improved. There are of course difficulties, we have a lot of red tape here in South Africa, but I have seen that with privatisation and changing rules, changes can happen a bit quicker and if Government would just buy into us a bit more and see our relevance, see that they need to up grade certain aspects of our infrastructure we can make this a low cost distribution centre."
For more information:
Grant Norman
Tel: +27 82 561 3998
Email: grant@finebros.co.za