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Competition and Tariffs Commission exposes consumers

by Mandla Ndlovu
05 Aug 2019 at 13:30hrs | Views
The Competition and Tariff Commission has banned the self regulation mechanisms which had been setup by the Grain Millers Association of Zimbabwe and other retailers in a bid to cushion the consumers from over pricing.

In a statement released recently, the CTC said, " It has come to the attention of the Commission that some producers and/or manufacturers are publishing recommended price ranges within which retailers/wholesalers must trade their goods/services, in the guise of cushioning consumers from likely exploitation by unscrupulous retailers. Whilst the initiative is deemed noble by consumers, however from the Commission's perspective such an initiative can be used as a platform of operationalising a cartel – the worst evil of all conducts in competition policy law and enforcement circles."
The Commission  is a statutory body that administers the Competition Act [Chapter 14:28] (the Act), mandated to promote and maintain fair competition in all sectors of the Zimbabwean economy. The commission is meant to ensure sanity and reasonable or best practices in terms of pricing and Tariffs.

Sources say Grain Millers and other retailers took heed of government efforts to curb overpricing and ventured into an exercise of self regulation and monitoring to ensure that prices do not exceed a set threshold. The Grain Millers had indicated that if retailers overcharge consumers would simply stop buying or reduce consumption rates. The move by the Competition and Tariffs Commission has clearly put the consumers at risk of over pricing as there are no other platforms or mechanisms to regulate prices to protect the consumer.

The Commission is said to have defended its move with the following statement:
"Players in the downstream – namely retailers and wholesalers, can construe the recommended price ranges as the minimum and maximum prices at which the goods can be sold in the market, disadvantaging consumers. Whilst price ceilings can be viewed as a mechanism to protect consumers from exploitation by unscrupulous retailers, the same cannot be said for the conduct of recommending minimum prices to be charged on goods and services given the likely anticompetitive effects to arise from such initiative. While it is permissible to set maximum recommended prices, the Act views setting minimum resale prices as an unfair business practice, a conduct prohibited in the Act. Part VII of the Competition Act [Chapter 14:28] and related provisions on unfair business practices and minimum resale prices therein state as follows:

Section 42 – Unfair Business Practices

(1) The Acts or omissions specified in the First Schedule shall be unfair business practices for the purposes of this Act.

(3) Any person who enters into or engages in or otherwise gives effect to an unfair business practice shall be guilty of an offence and liable – a) in the case of an individual  to a fine  not exceeding level twelve or to imprisonment for a period not exceeding two years or to both such fine and imprisonment; and b) in any other case to a fine not exceeding level fourteen."

Consumers have described the statement by the Competition and Tariffs Commission as absolute nonsense and reeking of bribery and corruption from some retailers and wholesalers who want to engage in profiteering exercises at the expense of the consumer.

Some consumers said the move by the CTC was blatantly anti government and anti people as it allows inflation to thrive as business has been left to do as it pleases in terms of pricing.

Source - Byo24News