BARRIERS TO ENTRY

Barriers to entry, by creating and reinforcing the market power of large firms, tend to lead to higher prices, lower levels of innovation and a less competitive economy. In a country like South Africa where there are significant challenges of unemployment, poverty and inequality, it is critical to understand the nature and extent of barriers to entry in the economy, in order to ensure that regulatory and policy interventions have a meaningful impact on creating inclusive and shared growth.

For this reason, CCRED conducted a programme of research focused on barriers to entry and inclusive growth, the project was funded by the National Treasury. The project involved researching and analysing the barriers to entry across a range of sectors in South Africa and in the region with the intention of formulating policy recommendations that will help to facilitate greater levels of entry and competition and thus drive higher growth.

Review papers

  1. Key debates in competition, capabilities development and related policies: Drawing the link between barriers to entry and inclusive growth

  2. The links between competition policy, regulatory policy and trade and industrial policies

Firm entry case studies

  1. Study on Barriers to Entry in Liquid Fuel Distribution in South Africa

  2. Competition, barriers to entry and inclusive growth - Soweto Gold Case Study

  3. Competition, barriers to entry and inclusive growth - Retail Banking - Capitec Case Study

  4. Competition, barriers to entry and inclusive growth - Fruit and Veg City Case Study

  5. Competition, barriers to entry and inclusive growth - 1Time and FlySafair Case Study

Sector case studies

  1. Competition, barriers to entry and inclusive growth - Telecommunications Sector Study

  2. Competition, barriers to entry and inclusive growth - Agro-processing

Policy briefs

  1. An Agenda for Opening up the South African Economy: Lessons from Studies of Barriers to Entry

  2. Barriers to entry for black industrialists - the case of Soweto Gold’s entry into beer

  3. Barriers to entry in banking, lessons from Capitec’s experience

  4. Barriers to entry in supermarkets

  5. Barriers to entry in telecoms

  6. Barriers to entry and inclusive growth: policy recommendations for agro-processing

Comments on legislation and guidelines

1. Information Exchange Guidelines

In 2017, the Centre for Competition, Regulation and Economic Development hosted a public platform to debate the Competition Commission's draft guidelines on the Exchange of Information between Competitors. 

Notable thinkers and academics in the competition space such as Professor Massimo Motta (former Chief Competition Economist at the European Commission's Directorate General for Competition), Professor Liberty Mncube (Chief Economist of the Competition Commission South Africa), and Professor Simon Roberts (Executive Director of CCRED) presented comments and stimulated the discussion around the key issues. 

Comments on information exchange guidelines

2. Competition Amendment Bill

The Competition Amendment Bill and accompanying Background Note and Explanatory Memorandum, published on 1 December 2017, represents an important and welcome step in strengthening the powers of the competition authorities, taking into account the high levels of concentration and racially skewed ownership and control of the economy. Pamela Mondliwa (CCRED Researcher) and Professor Simon Roberts (Executive Director of CCRED) comment on selected issues related to the Bill.

Comments on the Competition Amendment Bill