Competition Commission’s report shows shocking price increases in SA over past five years

The new Cost of Living Report compiled by the Competition Commission shows the battle of being a consumer in South Africa. Its statistics are shocking, such as electricity prices increasing by 68%, water by 50% and general inflation by 28%.

The Competition Commission published its inaugural Essential Food Price Monitoring Report, which systematically observed and tracked the prices of selected essential food items across their entire value chain from farm production through to retail outlets.

The primary objective of this report was to monitor price movements for staple food items, with the aim of identifying market inefficiencies, analysing pricing dynamics at each stage of the value chain and ensuring transparency in price transmission between producers, processors and retailers.

Now the commission expanded the scope of its price monitoring framework, restructuring the initial report into the Cost of Living Report that includes items beyond essential food to capture a more inclusive and representative view of household economic realities.

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Key items added to Cost of Living Report

James Hodge, chief economist at the commission, says this enhanced report retains its focus on essential food items but also incorporates additional key non-food items that affect the cost of living for households.

These include electricity, water supply, rentals for housing, primary healthcare services (general practitioners), minibus taxi fares and petrol, funeral policies, education and internet usage costs. The report also assesses the role of interest rates in the rising cost of living.

According to Hodge, the new report aims to provide essential insights into the affordability of basic goods and services.

“This analysis plays a crucial role in identifying the economic pressures various socio-economic groups, particularly low-income households, experience in a time of fluctuating prices and growing inequality.

“While the prices of some of the items in the report are administered prices that are set or influenced by government, such as electricity and water supply, it is important to understand the impact of rising costs for these services particularly for low-income households.”

The Competition Commission provides an analysis in the report of the key necessities that reflect unavoidable everyday expenses for low-income South African households, using inflation data from Statistics SA for the relevant categories from 2020 to March 2025.

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Shocking price increases over past five years

The inflation data is the average change over time of prices consumers paid for a basket of consumer goods and services.

Observations in this report include:

• Electricity prices increased by 68% over the five year period and water prices by 50%, which is a much higher rate than general inflation which increased by 28%.
• The cost of rent for houses and flats in South Africa increased moderately over the period and remain below overall inflation.
• The cost of general practitioner (GP) services in 2025 is substantially higher than increases in previous years. Hodge says this is concerning as only 16% of the population in South Africa is covered by a medical scheme.
• Minibus taxi fares generally tend to increase only when there is a major spike in petrol prices. However, once prices increase, they are permanent and not reversed once petrol prices decrease later.
• The cost of funeral policies remains significantly below overall inflation. This is encouraging given the importance of funeral policies among low-income households.
• Primary education inflation increased by 37%, while secondary education inflation increased by 42%.
• Internet usage costs for wired as well as wireless connections remain below general inflation. The cost of mobile data decreased after the Commission’s Data Services Market Inquiry in 2019 and have remained stable since then.

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Essential foods still analysed

In addition, the report provides an analysis of the aggregate spread between retail and producer prices for food items such as brown bread, canned pilchards, eggs, sunflower oil and maize meal.

Hodge says for their analysis, the spread is the percentage difference between the producer price of goods and the retail price.

“Importantly, the analysis of spreads is based on publicly available information and not intended to make inferences of anticompetitive conduct by individual firms whether acting alone or with competitors.

“It is actually used to assess price transmission through the value chain and show where spreads are expanding and contracting. While some staples, such as canned pilchards, have shown signs of responsible pricing at the retail level, other essential food items, including eggs, individually quick frozen (IQF) chicken, brown bread, sunflower oil and white maize meal, exhibit patterns of price stickiness and widening retail margins.

“Price stickiness is an economic concept where prices fail to change quickly in response to shifts in supply, demand or broader economic conditions.”

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Maize meal increased significantly

Other observations listed in this report include:

• In the first few months of 2025, the recovery of South Africa’s egg market remained uneven. Producer prices are on an upward trend, which raises some concerns given that South Africa’s poultry industry is now recovering well after the avian flu outbreak in 2023 and 2024. Egg prices are expected to decrease as markets start to normalise. A continued increase in producer prices is likely to be a cause for concern, Hodge says.
• The poultry industry in South Africa benefited from amongst others, increased availability, reduced import prices and lower input costs. It is encouraging to observe that retail margins of IQF chicken remained stable at under 40%.
• There has been a recent increase in producer-level prices from April 2025 in response to slightly higher wheat prices. The farm-to-producer price spread for brown bread in South Africa increased to 77%, above historic levels. At the retail level, following an initial increase in the producer-to-retail spread, the retail margin reduced to 15%, indicating that retailers absorbed subsequent increases in the producer price for brown bread, Hodge says.
• The retail price of sunflower oil has been increasing from the latter part of 2024, although producer prices of sunflower oil have been declining. Hodge says this upward movement occurred despite a noticeable decline in producer prices in February 2025, indicating a limited pass-through of cost reductions to consumers.
• In late 2024, the retail price for maize meal stood at R38.48 and has since increased to R43.04 by May 2025, marking a significant increase. White maize prices have fallen as we enter the new harvesting season in May 2025, but these are not reflected in maize meal producer prices, resulting in a sharp increase in margins.

The complete report is available here.