Minister on new Competition Commission focus…
The Competition Commission is to announce the terms of the market enquiry into “parts” of the retail industry within the next few weeks, said Minister of Economic Development, Ebrahim Patel, in his budget vote speech to Parliament.
What “parts” exactly were not clear from his speech, Minister Patel only saying it would involve large supermarket chains, grocery stores and small retail outlets like spaza shops.
At present the Competition Commission has launched a market enquiry into both the private medical industry and liquefied natural gas distribution process and was now in discussion with the construction industry on a similar restitution package as “redress for their collusion and price-fixing.”
Property ownership focus
Unusually, Minister Patel’s speech was short and to the point but he did say on the Competition Commission would be looking into the retailing industry and property ownership area.
He said the inquiry would involve “The structure of the industry including retail outlets in townships, the tenancy arrangements in shopping malls that seem to squeeze smaller players out and the impact of the growth of large retail chains on competition, jobs and small business development.”
Announcement appears in vacuum
Nothing was said on Minister Patel’s plans for the Competition Commission in the budget vote speech from Minister of Small Business, Lindiwe Zulu, nor in Minister of Trade and Industry, Rob Davies’ speech, DTI having been split the Competition Commission but still interested in entrepreneurship and job creation.
Deputy Minister of Economic Development, Madala Masuku, said nothing at all on the subject the Competition Commission in her speech but did advise Parliament that the department had been on a series of provincial business studies over six months on how to create more jobs and build small businesses and better service to the provinces. That possibly is the basis of what is now happening as a result of what they saw.
Small business seems stifled
The structure of small business and the relationship to retail chain outlets, competitive pricing and rentals must have been part of such observations.
Also minister, Lindiwe Sisulu, before being transferred to the post of minister of human settlements had told the select committee on economic development that “SMMEs contributed 57% of South Africa’s GDP and accounted for 56% of employment. The National Development Plan (NDP) envisaged that 90% of jobs created would be coming from small and medium enterprises.”
Partnerships in retailing and distribution
She told parliamentarians that economies around the world had shown that jobs were not created by large corporations, but by SMMEs. However, large corporations and big businesses should seek partnerships in South Africa so that they could assist the department in building small and medium enterprises and thus contribute to economic development, she said.
Manufacturing distribution was also an area discussed at length in government small business workshops recently attended by parliamentarians where it was seen that the large retailers have also control of country wide market distribution at retail level, only dealing with areas providing suitable economic return and more sophisticated road and rail infrastructure.
This market inquiry by Minister Patel therefore has an investigative ring to it rather than any direct attack on certain sectors in the retail industry.
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