Mmegi Online :: Wholesale giants accused of price fixing
Banners
Banners
Banners
Banners
Last Updated
Monday 24 September 2018, 15:01 pm.
Banners
Wholesale giants accused of price fixing

Four wholesale giants appeared before the Competition Commission on Tuesday accused of colluding with their retailer customers to predetermine prices of products sold to end customers.
By Isaac Pinielo Fri 25 Aug 2017, 18:00 pm (GMT +2)
Mmegi Online :: Wholesale giants accused of price fixing








Documents presented to the Commission show that the Competition Authority (CA) conducted investigations last year on the four wholesalers; Trident Holdings, Metro Sefalana Cash & Carry, Trans Africa and Trade World.

The investigations had been prompted by the outcome of a competitive analysis of the retail and wholesale sector study in 2013, which indicated that the four wholesalers might be engaging in anti-competitive conduct known as resale price maintenance (RPM).

RPM is described as a practice whereby a wholesaler and its retailer agree that the retailer will sell the wholesaler’s product at certain prices, at or above a price floor or at or below a price ceiling. If a retailer refuses to maintain prices, either openly or covertly, the wholesaler may stop doing business with it.

According to the Authority, this practice is anti-competitive as it prevents resellers from competing fairly on price, especially with regard to fungible goods.

In its investigations, the Authority found that the four wholesalers that deal in supplying grocery products to individuals and small independent retailers across the country, have banner groups through which they supply the grocery products. Each banner group has about 350 members, which are supplied with stock by the wholesalers at discounted prices.

Trans Africa has a banner group called 3-Square, Trade World has Trade Deal, Trident Holdings has Big-11, and Metro Sefalana Cash & Carry has Supa Deal and Supa-7.

The Authority indicated that the wholesalers together with their respective banner groups have contravened Section 26 of the Competition Act, which states that an enterprise shall not enter into a vertical agreement with another business enterprise to the extent that the agreement involves resale price maintenance.

In its enquiry, the Authority said it held meetings with the four wholesalers to establish and understand the relationship between the wholesalers and retailers, which are the banner group members. It was established that the wholesalers and the retailers often hold meetings to discuss items to sell on

Banners

promotion in which the wholesalers unilaterally determined the prices of the items on promotion.

Also, the Authority established that the retailers were required to participate in the monthly promotions conducted by the wholesalers and that the retailers were required to buy 300 promotion pamphlets for about P250 per month.

It said the retailers were obligated to observe the advertised prices and could not sell below or above the advertised, adding that failure to comply with the recommended price would result in termination of the agreement.

The retailers are only permitted to determine the prices of the goods outside the monthly promotion period. Furthermore, to ensure compliance with the requirements, the Authority allege that the wholesalers have officers who monitor and enforce compliance in each region of the country by conducting random check visits at the retailers.

Upon completion of the nine-month investigations, the Authority concluded that there was anti-competitive conduct between wholesalers and their retailers.

The Authority then proceeded to launch a complaint with the Competition Commission against the wholesalers, seeking an order declaring each wholesaler to be liable for payment of an administrative penalty of 10% of its annual turnover.

The Authority also sought the Commission to order the wholesalers to cease and desist from engaging in this prohibited practice, which is in contravention of the Competition Act. However, when the wholesalers appeared before the Commission they all applied for extension of time to be allowed to engage with the Authority into a settlement agreement. The Commission, which comprised Onkemetse Tshosa, Tendekani Malebeswa, Jay Salkin, Selinah Peters and Thembisile Phuthego, agreed that the parties should be given 30 calendar days to engage with each other.

Representing the Authority was Duncan Morotsi, Tapiwa Masie and Goitsemodimo Tseladikae. On the other side, Trident Holdings, Metro Sefalana Cash & Carry, Trans Africa, and Trade World were represented by Minchin & Kelly Attorneys, Osei-Ofei Swabi & Co, Bookbinder Business Law, and Isaac Seloko respectively.

Subscribe to our Newsletter
Banners
Banners
Banners


Business
Fri 25 Aug 2017, 18:00 pm
Fri 25 Aug 2017, 16:06 pm
Fri 25 Aug 2017, 16:06 pm
Fri 25 Aug 2017, 16:05 pm
Thu 24 Aug 2017, 18:00 pm
Thu 24 Aug 2017, 16:39 pm
Wed 23 Aug 2017, 18:00 pm
Wed 23 Aug 2017, 15:55 pm
Wed 23 Aug 2017, 15:55 pm
Tue 22 Aug 2017, 18:00 pm
Tue 22 Aug 2017, 16:35 pm
Tue 22 Aug 2017, 16:34 pm
Fri 18 Aug 2017, 18:00 pm
Fri 18 Aug 2017, 15:46 pm
Fri 18 Aug 2017, 15:45 pm
Fri 18 Aug 2017, 15:42 pm
Thu 17 Aug 2017, 18:00 pm
Thu 17 Aug 2017, 11:06 am
Wed 16 Aug 2017, 18:00 pm
Wed 16 Aug 2017, 16:09 pm
Wed 16 Aug 2017, 16:08 pm
Tue 15 Aug 2017, 18:00 pm
Tue 15 Aug 2017, 16:23 pm
Tue 15 Aug 2017, 16:22 pm
Fri 11 Aug 2017, 18:00 pm
Banners
Banners
Exchange Rates
FOREIGN EXCHANGE: Wednesday, 17 Jan 2018
FOREIGN / PULA
PULA / FOREIGN
1 USD = Pula   9.7656
1 GBP = Pula   13.4590
1 EUR = Pula   11.9617
1 YEN = Pula   0.0882
1 ZAR = Pula   0.7938
1 Pula = USD   0.1024
1 Pula = GBP   0.0743
1 Pula = EUR   0.0836
1 Pula = YEN   11.34
1 Pula = ZAR   1.2597
Subscribe to our Newsletter
have a story? Send us a Tip
Banners
  • Previous
    Next
    Masa Centre
    ::: Monday 24 Sep - Monday 24 Sep :::
  • Previous
    Next
    Riverwalk
    ::: Monday 24 Sep - Monday 24 Sep :::
  • Previous
    The Meg
    Next
    Gamecity
    ::: Friday 10 Aug - Sunday 07 Aug :::
    The Meg
Selefu
BASOP!
Banners
Banners
istanbul escort