Retailers accuse Competition Commission of keeping them in the dark

Retail giants under investigation for anti-competitive behaviour have cried foul at being kept in the dark about the Competition Commission's sources and preliminary reports. Pick n Pay and Massmart feel too little was said before the official investigation was launched in June.

"The details of the investigation were explained to us in the media after the announcement of the probe," Pick n Pay said last week.

Massmart said it had not been able to trace any report regarding a preliminary investigation.

Retailers Massmart, Pick n Pay, Shoprite, Spar and Woolworths are being investigated by the commission for possible anti-competitive behaviour.

The commission is focussing on issues such as exclusive long-lease agreements in malls, category management and information sharing.

Llewellyn Steeneveldt, the group commercial executive at Massmart, said investigations were easier to establish and tended to be conducted in closed sessions by the commission whereas inquiries consisted of statutory panels comprised of industry experts and took time to establish.

The commission had contacted retailers three weeks ago to begin the investigation.

The commission's strategy manager, Nandi Mokoena, said none of the retailers had asked for the information in the preliminary study, but pointed out that any report generated by the commission was restricted in terms of the Competition Act. The outcome of the study led to the decision to launch a formal investigation.
"We picked up on certain focus areas through talks with industry participants and experts," she said.

Mokoena said Cosatu, the Milk Producers' Organisation and the National Agricultural Marketing Council had issued their concerns to the commission, which formed part of the initial study. She said aspects brought to light in previous probes in the food sector, including the recent investigation into the bread industry, also raised concerns.

The probe had also been fuelled by concerns from individuals over high food prices.

Pick n Pay maintained that anecdotal evidence presented to the commission by outside parties should have been discussed with the retailers.

Mokoena said there was a significant difference between a study and an investigation.

"A study has no influence on a person's rights and the findings of it are not legally binding," she said.

The commission's policy and research unit had been tasked with exploring various avenues concerning high food prices. Mokoena said the commission had opted for an investigation rather than an inquiry since the latter would only involve a broader look at potential concerns in the industry.

"With the investigation, we have identified specific issues we can address but there is no authority in the act to conduct an inquiry that would have the outcomes that an investigation might have," she said.

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