WHAT THE COMMISSION WILL LOOK AT
1. Supermarket expansion into townships 2. Exclusive leases in malls 3. Foreign traders’ competition with locals 4. Regulations and bylaws affecting traders 5. “Buyer groups” in the informal economy 6. The effect of “certain identified value chains” competitors from abroad as much as by malls.
The proposed inquiry seeks to “examine the dynamics of competition between local and foreignowned small and independent retailers”.
The point is “to understand whether this may contribute to the decline in small and independent retailers in townships, peri-urban areas, rural areas and the informal economy”, seeming to mean that foreign shopkeepers’ conduct is to be investigated.
Foreign-owned shops “have been perceived to be more successful than the others and the reasons therefore are unclear”, read the terms of reference.
The supposed superiority of foreign-born traders is often invoked as one of the major contributors to tensions that have resulted in the looting of foreign shops and mob attacks on foreigners.
The minister of small business development, Lindiwe Zulu, this year drew criticism for saying that foreign shop owners “cannot barricade themselves in and not share their practices with local business owners” in the midst of widespread violence.
The terms of reference specifically mention the “impact of buyer groups” on small retailers.
According to commission spokesperson Mava Scott, this is a reference to the popular belief that foreign shop owners undercut their local competitors through bulk buying stock as groups.
The inquiry seems to be aimed at, in part, interrogating the myths and common accusations that are thrown around when xenophobia rears its head.
“The small [retail] sector has come to us to say these guys [foreigners] are anti-competitive,” said Scott.
Another common complaint was that foreign-born shopkeepers sold substandard goods, he said.
The inquiry will try to establish if there is anything in these complaints that actually constitutes an offence in terms of competition law.
The concern about malls and foreign competition echoes the long-standing gripes of organised spaza owners in, among other institutions, the National African Federated Chamber of Commerce and Industry (Nafcoc).
Another leg of the inquiry being proposed is the effect of regulations, including bylaws, on traders.
This recalls the disastrous attempts by, among other cities, Johannesburg to “clean” out traders in its central business district through heavy-handed and often illegal means.
The retail inquiry will be the third concurrent market inquiry after the commission received the power to conduct these large-scale investigations in 2013.
The sweeping healthcare inquiry is ongoing with its own offices in Pretoria while the inquiry into the liquid petroleum gas sector is also taking shape.