At no cost to the state, RSA Group CEO Jaco Oosthuizen reminded delegates to the World Union of Wholesale Markets (WUWM) conference last week, wholesale markets in South Africa ensure that millions of people both locally and across the borders are supplied with fruit and vegetables.
"I believe the open market system is South Africa's best-kept secret," he maintained. "It is a stable commercial foundation for producers. It motivates them to take risks. It is where free forces of supply and demand meet and they find an authentic price, contrary to the global world where it's highly subsidised, chain store-dominated, and contractually oriented. In the South African context, farmers do not go out of business because of low prices. They go out of business because of low income. In most international markets, they struggle to meet this challenge. In South Africa, we not only meet it but we thrive within it. At zero cost to the state."
He believes that all of the municipal markets will in 2025 reach R25 billion (1.2 billion euros) in sales. When retail fresh produce sales are converted to a wholesale level, he said, it reaches R15 billion a year.
The integrity of the system is protected by important guard rails and its quick conversion of product into cash - a farmer is paid within two to three working days - is the envy of those operating in other businesses.
South African municipalities have a constitutional mandate to establish markets and are the custodians of the infrastructure. The city council charges producers a 5% ad valorem commission on the thousands of sales transactions every day. Additional facilities attract additional costs.
"The enzyme that stitches this together is the agent model. Agencies charge a 5 to 7.5% ad valorem commission."
Jaco Oosthuizen, market agency RSA Group CEO
The commission-based system on which South Africa's markets are based is a system the world must replicate, said acting Joburg Market CEO Sello Makhubela. "I agree with Jaco [Oosthuizen] that it is our best-kept secret and it's a secret we need to share with the world in terms of how we operate."
11,000 to 14,000 Joburg market daily visitors
The Joburg Market was established in 1893 and moved in 1974 to its current City Deep premises. "It's amazing that when we started in 1974 in City Deep, the annual turnover was about R32 million [1.6 million euros]. As we sit currently, we made R11.3 billion [561 million euros] turnover," said Makhubela.
It is the largest market in the country, with over 8,000 producers on its database and, on average, 11,000 to 14,000 people visiting it every day. Over 6,000 people work at this one market.
"The rest of Africa has discovered us," Oosthuizen remarked. "Buyers arrive in Gauteng on a daily basis from countries across Southern Africa. I believe it's a template for Africa and beyond."
The commission-based system creates more options for producers and rewards risk-taking in a bigger way than the simple wholesale system followed elsewhere in the world.
Acting CEO of the Joburg Market, Sello Makhubela
In 2024, 1.4 million tonnes of produce - roughly half of the tonnage handled by Rungis Market in Paris, Makhubele noted - were sold at the Joburg Market. The wholesale system has lost market share of the country's gross fresh produce output to retail and export. The market wants to reclaim that share, he remarked.
Last week on a single day the market made about R70 million which is their best daily transaction ever but he added that the loss of mass traded at the market was worrying for food security. "We are growing on price but not on mass. We have a responsibility around food security."
Political and economic factors affecting the world are definitely affecting the Joburg Market, he continued: climate change, the tariff war, food safety and a growing urban population. He underlined the importance of improving market infrastructure.