Several sectors hit by cross-border cartels
Bid to uproot anticompetitive price collusion
THE construction‚ cement‚ poultry‚ milling and retail sectors have been singled out as the most plagued sectors by cross-border price-fixing‚ collusion and bid-rigging, at the expense of the poor in Southern African Development Community (SADC) member states.
The identified sectors are top of the priority list of the 15-member agreement on which to share expertise‚ information‚ resources and financial muscle to uproot anticompetitive connivance.
South Africa’s competition commissioner, Thembinkosi Bonakele, said the region had a long history of cross-border cartels, but there had been no cooperation arrangement to jointly combat the harmful anticompetitive practice.
“It is important that we look at it from a regional point of view to ensure there is no safe haven for cartels within SADC,” he said.
“We are committed to assist each other in uprooting them . . . the area involves price-fixing‚ collusion and bid-rigging, where firms coordinate each other’s responses on tender bids, often by governments‚ so that is the area of focus.”
However‚ for the agreement to succeed the countries would have to first overcome some hurdles as member states were at different levels of competition laws and institutions.
Zambia’s director of mergers and monopolies‚ Luyamba Mpamba‚ said out of 15 SADC member states that were part of the agreement‚ five – Lesotho‚ Mozambique‚ Angola‚ Madagascar and Democratic Republic of Congo – either had no competition laws or had the laws but were in the process of establishing institutions to enforce those laws.
“Some countries are in a situation where‚ for instance‚ there is cartel conduct in the country but there is no competition authority so it becomes difficult to enforce the law there. Sometimes there is law but no institutions set to enforce the law. Cartels may get away with that behaviour there‚” she said.
Mpamba said it was important for the SADC secretariat to encourage the formation of competition authorities‚ saying that some countries were more advanced and more developed in terms of competition laws and institutions whereas others were just beginning.
“So we have to try to bridge the gap by cooperating with each other‚” she said.
Botswana’s Competition Authority’s director for mergers and monopolies‚ Magdeline Gabaraane‚ said their institution was established five years ago and would benefit from South Africa, which was far ahead in this regard.
Gabaraane said anticompetitive behaviour was harmful in that it robbed the poor and the benefits of competition included choice and quality of goods.
A recent World Bank study on competition policy in South Africa showed that by tackling four cartels in wheat‚ maize‚ poultry and pharmaceuticals‚ about 202 000 individuals were lifted above the poverty line through the lower prices that followed. The savings put an extra 1.6% back into the pockets of the poorest 10%. — TMG Digital