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EXCESSIVE PRICING IN THE GLOBAL PHARMACEUTICAL INDUSTRY

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EXCESSIVE PRICING IN THE GLOBAL PHARMACEUTICAL INDUSTRY

In the developing world, disease and poverty are interdependent making access to essential medicines at affordable prices even more critical. 80% of the two billion people worldwide without access to essential medicines live in low income countries. As such, competitive rivalry in the pharmaceutical industry can improve access to medicines by reducing prices and through motivating brand companies to challenge existing patent drugs and create new and improved medicines. Furthermore, upon expiration of patent drugs, competition encourages generic companies to provide less expensive alternatives of medicines.

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HEINEKEN DEVELOPING A TASTE FOR LOCAL CRAFT BREWERS

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HEINEKEN DEVELOPING A TASTE FOR LOCAL CRAFT BREWERS

One of the world’s largest brewing houses, Heineken, has taken a step towards a larger share of the South African beer market with the acquisition of the local black owned craft brewer, Soweto Gold, in October 2017. This development comes just months after Heineken bought out the Stellenbosch-based brewery, Stellenbrau. The mergers mean that the brands can now be marketed to a global customer base. While this may be good for the respective owners of the acquired firms, the transactions reflect the challenges faced by Soweto Gold and other small brewers in accessing routes to market on their own.

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The Case for Patient Capital: Small Business Funding in South Africa

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The Case for Patient Capital: Small Business Funding in South Africa

Small and Medium Enterprises (SMEs) are key drivers of inclusive growth in the South African economy, contributing about 55% to the gross domestic product, while their contribution towards employment is as high as 60%. In addition, small firms and new entrants enhance competition within different economic sectors, resulting in lower prices and greater variety for consumers, as well as dynamic and productive efficiencies.

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Recent Cartel Penalised in South Africa: Possible Impacts in the Region?

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Recent Cartel Penalised in South Africa: Possible Impacts in the Region?

The South African Competition Commission has been very successful in uncovering cartels, with a large number of settlements over the past 10 years. It should be noted that settlements typically involve an admission on the part of the companies involved. Given the regional scope of many companies’ activities across southern Africa this begs the question as to whether these cartels affected neighbouring countries and should also be prosecuted in these countries. 

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South Africa's Public Transport Market Inquiry: Integrating Modes

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South Africa's Public Transport Market Inquiry: Integrating Modes

The Competition Commission of South Africa’s land-based public passenger transport market inquiry, which commenced in June 2017, addresses a range of questions including issues with intermodal transport links. The inquiry relates to excessive short distance passenger transport fares charged by buses, peak season long distance bus fares, operational subsidies disadvantaging operators that are not subsidised, and restricting particular providers to operate in specific areas and routes.  The issues to be considered cut across several public transport modes. The inquiry coincides with the Gauteng provincial government’s plan to expand its high speed train, Gautrain, into two of Gauteng’s largest townships.

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Key Issues in Developing Cosmetics, Soaps, and Detergents Value Chains - South Africa and Zambia

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Key Issues in Developing Cosmetics, Soaps, and Detergents Value Chains - South Africa and Zambia

Firm competitiveness can be understood as the ability to provide products and services at least as efficiently and effectively as competitors. At the industry level, international competitiveness is the ability of domestic firms to achieve sustained success against foreign competitors such as in terms of unit labour costs and relative productivity. Competitiveness is critical if a country’s firms are to take advantage of the opportunities presented by the regional and international economy. Furthermore, it can stimulate industrialisation and economic growth which subsequently promotes job creation, higher productivity and innovation.

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What can we Learn from the First COMESA Restrictive Business Practice Case?

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What can we Learn from the First COMESA Restrictive Business Practice Case?

In the first quarter of 2017 the COMESA Competition Commission (CCC) assessed its first restrictive business practice complaint. The case relates to the exclusive award of marketing and media rights for the main regional football competitions on the African continent.

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The Implications of Global Consolidation in the Seed Industry

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The Implications of Global Consolidation in the Seed Industry

The world population is expected to reach ten billion by 2050, which has implications for food security in the context of climate change. In the recent $43 billion acquisition of Syngenta, a global seed company, by ChemChina, a chemicals company, the CEO of ChemChina notes that the merger was driven by China’s need to secure future food supply, given the country’s history of famines. This strategy highlights the importance of access to seeds as a key input in agricultural production. This article looks at the implications of increased consolidation in the global seed industry on access to seed and food security.

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COMESA CC Approval of the BIH and Carlsberg Beer Merger

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COMESA CC Approval of the BIH and Carlsberg Beer Merger

In April 2017, the COMESA Competition Commission (CCC) conditionally approved a large merger between Brasseries Internationales Holdings (BIH) Ltd and Carlsberg Malawi Ltd (Carlsberg). BIH is the holding company of Castel Group, a French beverages company. The second party to the merger, Carlsberg, is a beverages manufacturer participating solely in the Malawian market in Africa. The merger spans four countries: Ethiopia, Malawi, Madagascar and the Democratic Republic of Congo. 

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Editor’s note: SADC Competition Authorities sign MoU for cooperation on competition issues

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Editor’s note: SADC Competition Authorities sign MoU for cooperation on competition issues

Thando Vilakazi

In May 2016, representatives of the competition authorities from nine Southern African Development Community (SADC) member states met in Gaborone, Botswana to sign a Memo-randum of Understanding (MoU) to cooperate on competition matters. 

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Prospects for the East African Community Competition Authority

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Prospects for the East African Community Competition Authority

Shingie Chisoro Dube and Anthea Paelo

In 2015, the East African Community Council of Ministers adopted the East African Community Competition (Amendment) bill which provided for the establishment of the East African Community (EAC) Competition Authority (EACCA).

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Review of COMESA merger and enforcement activity

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Review of COMESA merger and enforcement activity

Maria Nkhonjera and Tatenda Zengeni

Since opening its doors in January 2013 the COMESA Competition Commission (CCC) has seen growth in the number of its merger cases. This growth followed a number of challenges initially faced with the interpretation of certain provisions of the Act, jurisdiction and high filing fees.

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Shipping cartel fines in South Africa

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Shipping cartel fines in South Africa

Anthea Paelo

In August this year, two shipping companies were fined by the Competition Commission of South Africa for restrictive horizontal practices including; fixing a purchase or selling price of a product or service, dividing markets and collusive tendering in the transport of vehicles, equipment and/or machinery by sea on the route between Japan and South Africa.

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Uber: a game-changer in passenger transport in South Africa?

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Uber: a game-changer in passenger transport in South Africa?

Shingie Chisoro Dube

The entry of the app-based Uber service into South Africa’s local passenger transport industry in 2013 raises important competition and regulatory issues. Uber is a taxi smart phone application that uses the customer’s smartphone to detect their specific location using the global positioning system (GPS), and instantly connects the customer to the nearest available driver. Uber taxis work in exactly the same manner as traditional metered taxis in that they both take the customer to their intended destination for a metered fee. However, Uber is a technology-driven service that uses a convenient electronic taxi-hailing system to find, book and pay for taxi services. This presents an innovative new technology platform in the local taxi industry.

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Multi-firm cartels: Collusive tendering in furniture removal markets in SA

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Multi-firm cartels: Collusive tendering in furniture removal markets in SA

Mohlahlego Cornelia Matumba

Firms engaging in a cartel are attempting to increase their joint profits through an agreement to suppress competition among themselves. The harmful effects of cartels are related to the number of firms involved, the size of the affected market, and the durability of the cartel.1 Cartelist often agree on the strategy for pricing, supply to the market or market allocation and they face the critical challenge of coordinating the behaviour of all cartel participants around the agreed strategy. This includes monitoring the behaviour of cartel participants to identify and prevent defections from these collusive strategies and preventing entry or expansion by non-cartel firms.

 

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New energy in the region’s fuel market: Puma Energy - Brent Oil merger

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New energy in the region’s fuel market: Puma Energy - Brent Oil merger

Maria Nkhonjera

The recent merger in South Africa between Puma Energy and Brent Oil, recently approved by the competition authorities, may change the competitive landscape in regional and South African markets for fuel retail, leveraging Puma’s long-established presence throughout the rest of the region. This article considers the implications of the merger.

 

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The black industrialists programme in context: the real barriers to entry

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The black industrialists programme in context: the real barriers to entry

Anthea Paelo

South Africa has one of the highest levels of income inequality in the world with a Gini coefficient that has remained around 0.65 over the past decade.1 In addition, South Africa’s unemployment rate, using the narrow definition, at 26.4% is very high.2 Much of this has been attributed to the legacy of apartheid during which the majority of South Africans were economically marginalised with few economic opportunities.