Daily Dispatch

Several sectors hit by cross-border cartels

Bid to uproot anticompet­itive price collusion

- By SIPHO MABENA

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

 ?? Picture: ALAN EASON ?? ANTICOMPET­ITIVE PRACTICES: 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
Picture: ALAN EASON ANTICOMPET­ITIVE PRACTICES: 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

Newspapers in English

Newspapers from South Africa