The Competition Commission has on 2nd September 2011, approved, with conditions, a joint venture between the multinational grain trader Bunge, and South African grain storage and trading company, Senwes. In terms of the joint venture, a separate legal entity, Bunge Senwes Proprietary Ltd, has been formed, with each party controlling 50%.
According to Mariam Mayet of the ACB, “the joint venture marks Bunge’s first significant investment in Africa and places both players in a powerful position in an already concentrated market.”
The ACB made written submissions to the Competition Commission with regard to the joint venture, and raised concerns about the impact such a large corporation such as Bunge would have on South Africa’s agricultural sector. Bunge is one of the so-called ‘ABCD’ group of grain traders, along with Cargill, Archer Daniels Midland (ADM), and Louis Dreyfus. The ABCD group contains some of the largest, most secretive and influential corporations in the world. In 2008, with hundreds of millions of people driven to hunger by the dramatic food price rises, the profits of these corporations soared.
As the global economy continues to stagger from one crisis to the next, food prices are again sky-rocketing. In 2010, Bunge’s revenues amounted to a whopping $45 billion, equal to 12% of South Africa’s GDP. In addition to being the largest miller of dried maize in North America, Bunge is the world’s number one seller of bottled vegetable oil, and the second largest producer of margarines. Bunge is also one of the world’s largest handlers of soybeans, especially in Latin America. Senwes was established as a regional grain Co-Operative in 1910 and is South Africa’s largest handler of grains and oilseeds. Senwes owns approximately 25% of all storage capacity nationwide. It is also a market leader in the trade of three of South Africa’s most important crops: white maize, sunflower and wheat. In terms of the conditions imposed by the Competition Commission, Senwes is to ensure that all the grain storage and handling services it offers to Bunge-Senwes will also be available on the same terms to its (Senwes’) other clients. The grain storage industry has been subject to a previous large-scale investigation by the Commission, following complaints that Senwes was using its dominant position in the grain storage sector to the detriment of rival firms. “
The ACB is extremely concerned that Bunge’s entry into South Africa will facilitate the importation of millions of tons of genetically modified (GM) soya products from Latin America into SA’s market. We are opposed to GM food products, as they pose unacceptable risks to human and animal health, the environment and society,” says Gareth Jones, a researcher with the ACB.