Thursday, June 13, 2024

Competition Authority probes market dominance by big brands

The Competition and Consumer Authority (CAA) has revealed that it is still probing some retail giants for reportedly stifling competition.

In its latest annual report, the Authority indicates that it commenced conducting a market inquiry on In-house brands in the year 2015 to 2017.

“One of the findings of the market inquiry indicated possible abuse of market power by different retailers/ wholesalers use of in-house branded products to stifle growth of family brands,” reads the report. It states that, “The behaviour is alleged to possibly be practised by Spar Wentzel Group, Tsetseng Retail Group, Choppies Enterprises Limited, Sefalana Group, Pick N Pay, Shoprite/ Checkers/ Usave and Eureka/ Trident Group.”

The report states that, “The case is still under investigation and will be carried forward to the next financial year.”

Another case probed by the Authority involves Botswana Dental Association vs BOMAID and Other Medical Aid Funders. This is a case of allegation of possible abuse of dominance in the form of refusal of access to an essential facility and possible horizontal agreement through price fixing by Botswana Medical Aid Society (BOMAID), Pula Medical Aid (PULA) and Botswana Public Officers Medical Aid Scheme (BPOMAS).

“After receiving a complaint from Botswana Dental Association (BODEA), the Authority initiated an investigation against BOMAID, Pula and BPOMAS. After the Authority served BOMAID with a Notice of Intention to Investigate, BOMAID approached the High Court challenging the Authority’s jurisdiction and proclaimed to be exempt from the Competition Act,” the CAA says. It states that as a result of the matter brought before the High Court, the process of investigation has been put on hold until the High Court makes a determination on the matter.

“The case will be carried forward to the 2022/23 financial year and the process of investigation will restart only after the High Court ruling,” says the report says.

Another matter is Competition and Consumer Authority vs Conduit Investments (Pty) Ltd. The report explains “This is a case of alleged abuse of dominance through margin squeeze levelled against Conduit Investments (Pty) Ltd.”

The Authority initiated an investigation against Conduit Investments (Pty) Ltd after receiving a complaint from a whistle-blower. The whistle-blower alleged that Conduit Investments (Pty) Ltd (a crusher dust producer and supplier located in Moshana (near Kanye) could be abusing its market power by charging its customers (both brick moulding businesses and individual customers) a much high price for crusher dust. It is alleged that Conduit Investments also competes with customers that mould bricks as it also has presence in the downstream market.

“By charging its crusher dust customers a high price, it is alleged that the strategy is for these brick moulding customers to find it difficult to compete with Conduit Investments in the business of selling bricks in the downstream market,” the report says. It states the case is still under investigation and will be carried forward to the 2022/23 financial year Financial Year and Closed in 2021/22.

Another matter is that of Cotton Fields (Pty) Ltd vs Total Botswana (Pty) Ltd. Cotton Fields (Pty) Ltd lodged a complaint with the Competition and Consumer Authority alleging that Total Botswana (Pty) Ltd had terminated the lease agreement for a service station without any cause. Cotton Fields (Pty) Ltd alleged that the termination of the contract could have been provoked by its by Cotton Fields (Pty) Ltd refusal to participate and implement the merchant agreement imposed by Total Botswana (Pty) Ltd.

It was further alleged that Total Botswana (Pty) Ltd dictated the price and margins at which the merchants party to the merchant agreement are to re-sell petroleum products and participating goods and services to Total Botswana fuel cardholders. The Authority investigated some elements of the complaint relating to allegations of resale price maintenance by Total Botswana (Pty) Ltd.

“While the investigation was ongoing, Cotton Fields (Pty) Ltd filed an interim relief application requesting the Competition and Consumer Tribunal to withhold the termination of lease agreement by Total Botswana in respect to the operation of Game City Total Filling Station,” the report says.

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