JOHANNESBURG, September 1 – Deputy President Cyril Ramaphosa on Friday, warned against cartels saying that price fixing hampers development, reduces job opportunities and causes undue hikes in prices of goods.
“When organised cabals steal from public resources and unsuspecting consumers, they break trust, undermine social cohesion and destroy lives,” Ramaphosa said speaking at the 11th annual competition law, economics and policy conference at the Gordon Institute of Business Science.
“When corporate greed gives rise to price fixing, market division and collusive tendering, governments and citizens alike become poorer. This is not only unfair. It is also unsustainable.”
Gauteng Premier David Makhura, Minister of Economic Development Ebrahim Patel, and Competition Commission head Tembinkosi Bonakele were in attendance as well as other senior government officials and international guests.
Ramaphosa said the competition policy in South Africa can not be limited merely to the promotion of market efficiency. He said it must be an instrument to effect fundamental economic and social change.
“From the advent of democracy, we have argued that competition policy has a pivotal role to play in redressing the injustices of the past,” said the deputy president.
“It was to underline this imperative that we declared in the Preamble to the Competition Act that: ‘ … apartheid and other discriminatory laws and practices of the past resulted in excessive concentrations of ownership and control within the national economy, inadequate restraints against anticompetitive trade practices, and unjust restrictions on full and free participation in the economy by all South Africans’.”
Ramaphosa, who is the leader of government business in the National Assembly, said the economy must be open to greater ownership by a greater number of South Africans.
“We said that the purpose of the Act is to provide all South Africans equal opportunity to participate fairly in the national economy and to promote employment and advance the social and economic welfare of South Africans.”
He said the purpose of the Competition Act was to facilitate economic transformation that is radical, inclusive and sustainable. Ramaphosa said that as stakeholders work together to fundamentally change the economy, they “are bound to ask whether – in substance and practice – our policies, laws and institutions sufficiently advance these objectives”.
Ramaphosa said South Africa inherited a “racially skewed economy that had a few dominant players”.
Therefore, market dominance in the South African context refers not only to specific sectors in which significant market share has been unfairly captured and retained by a few companies but also to the concentration of ownership and control in the hands of white South Africans, specifically white men, he said.
“Black South Africans are for the most part excluded from exercising control over the most important economic levers. We must, therefore, measure the effectiveness of our competition policy by the extent to which it contributes to undoing the racial and gender dimensions of economic concentration,” said Ramaphosa.
“As Minister Ebrahim Patel said yesterday, our competition policies should concern themselves not only with the conduct of companies but also the structure of the market.
“Where the structure of markets are found to inhibit competition, innovation, and new entrants, then we need to have appropriate policy instruments to change the structure.”
The deputy president narrated a story of struggling South Africans whose daily existence was dependent on affording bread.
He said the sad situation was “made even more desperate” by the actions of companies that collude to keep the price of bread artificially high.
“When cartels fix the price of a necessity like bread, poor families are sometimes forced to choose between paying for school transport or starving,” Ramaphosa explained.
“When the costs of telecommunications including data are high, small businesses can be forced to close shop or lay off personnel. When the private health care system fixes prices for life-saving drugs and overcharges for admissions, individuals and families find themselves compelled to use the already overburdened public health system.”
He said in its deliberations the conference must remain alert to the indignity of poverty that affects many young South Africans.
“We must refuse to be numbed by it. It is inhumane and unnatural. Our actions can ease or compound the suffering of young people like them. Competition policy must contribute to the achievement of sustainable livelihoods.”
Ramaphosa said as social partners, it is “our responsibility” to confront attitudes and end practices that place the activities of business at odds with the interests of society.
“By resisting competition and charging more for products and services, businesses add to the hardships of the ordinary poor. In doing so, they are complicit in perpetuating poverty and deepening inequality,” said Ramaphosa.
“As social partners, we share a determination and commitment to develop our economy, eradicate poverty and fundamentally transform our society.”
– African News Agency (ANA)