SADC deal to tackle cartels

Countries agree to cooperate against anti-competition scourge

CONSTRUCTION, cement, poultry, milling and retail have been singled out as the top sectors plagued by cross-border price-fixing, collusion and bid-rigging at the expense of the poor in the Southern African Development Community member states.

The identified sectors are top of the priority list of the 15 SADC member states’ agreement to share expertise, information, resources and financial muscle to root out anti-competitive 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 anti-competitive 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 the SADC,” he said.

“We are committed to assist each other in uprooting them.

“The area involves price-fixing, collusion and bid-rigging . . . so that is the area of focus,” he said.

But for the deal to succeed the countries would first have to overcome some hurdles as member states had different levels of competition laws and institutions.

Zambia’s director of mergers and monopolies, Luyamba Mpamba, said that out of the 15 SADC member states, Lesotho, Mozambique, Angola, Madagascar and the Democratic Republic of Congo either had no competition laws or were in the process of establishing institutions to enforce their laws.

“So we have to try to bridge the gap by cooperating.”

Botswana Competition Authority mergers and monopolies director, Magdelene Gabaraane, said their institution, established five years ago, would benefit from South Africa, which was far ahead.

She said South Africa had uncovered a lot more cartels and the competition culture here saw many countries benchmarking themselves against South Africa.

“You also find that the markets are not the same – for instance, Botswana’s market is not as complex as South Africa’s and companies that are in Botswana are headquartered in South Africa, so cooperation with SA is paramount.”

She said anti-competitive behaviour robbed the poor of the benefits that would flow from competition, choice and quality of goods.

A recent World Bank study on competition policy in South Africa showed that through the tackling of four cartels, in wheat, maize, poultry and pharmaceuticals, some 202 000 people were lifted above the poverty line through the lower prices that followed.

The gross effects of cartels on the continent are also documented in a joint report by the African Competition Forum and the World Bank, which showed that the retail prices of 10 key consumer goods, including bread, milk and eggs, were on average 24% higher in African cities than in other economies.