THE Competition and Tariff Commission (CTC) has advised small to medium enterprises (SMEs) to report suspected anti-competitive practices by big corporates.
In its first quarter newsletter, the CTC noted that cases involving SMEs as complainants were few mainly because sector players were unaware of the competition law.
Competition law and policy plays a critical role in the development of the sector if effectively enforced. It promotes growth of SMEs by providing equal and fair opportunity to compete with well-established companies. It also shields the sector from anti-competitive behaviour that might be practiced by big corporates.
In Zimbabwe, SMEs accounts for more than half of the country’s gross domestic product (GDP) and remain a major employer.
“Cases involving SMEs as applicants are few mainly due to low level of knowledge of the competition law in the sector,” said CTC. “This is not unique to Zimbabwe but common in other jurisdictions.”
It said affected SMEs can lodge complaints in form letters, detailing suspected anti-competition practices. Upon receipt of the letter, the CTC immediately institute investigations.
In the past, the CTC said it made decisions that directly protected SMEs from anti-competitive behaviour by big companies. For instance, the commission investigated allegations by opaque brewers, Ingwebu Breweries from Bulawayo that Delta Corporation was withdrawing its crates and empty containers from the market.
Investigations also established that other smaller brewers also faced similar challenges.
The CTC found that Delta was stocking empty crates and loose containers belonging to smaller players.
“The analysis established that Delta was engaging in a practice which restricts competition to a material degree,”
it said. Analysts say awareness programmes were key to educate SMEs on the competition law and remedies for anti-competitive practices.
The CTC noted adherence to competition law and policy would ensure firms are free to carry on their business in a fair and competitive environment, promotes a level playing field in all markets and sectors and promotes increased efficiency and innovations.
Competition law also protects SMEs by deterring large firms from adopting abusive and other anti-competitive practices. Sectors prone to such abusive behaviour include retail, especially high-end specialised or branded goods where resale price maintenance is widespread. Competition law makes it difficult for big companies to impose artificial entry barriers to various markets and trade more freely.
It also benefits SMEs from lower inputs costs that might occur in a more competitive environment.