Wholesalers, retailers warned against setting maximum prices

THE Competition and Tariff Commission (CTC) has cautioned wholesalers and retailers against charging maximum set prices for goods, warning the watchdog will not hesitate to investigate sectors colluding on pricing.

BY FIDELITY MHLANGA

This follows recent announcements of recommended maximum wholesale and retail prices for various goods and services.

“Historically, CTC has observed that whenever a recommended maximum price is announced, retailers or wholesalers, have a tendency to all charge that maximum price under the guise of complying with the stipulation,” CTC said in a statement yesterday.

The competition watchdog said while players may use similar formulas to determine prices at which they sell their products, certainly two or more players cannot charge the same price for identical products given the different overheads base, capacity utilisation levels, economies of scale and other incidentals to operations.

“In this respect, in spite of the recommended maximum prices the commission expects all players in any sector with the recommended maximum prices to charge significantly different prices that facilitate the competition process,” it said.

Instances where players charge exactly same prices or price fixing will be deemed to have colluded to commit an offence prohibited under the Competition Act. Price fixing defeats the promotion of competition and enhancement of consumer welfare.”

CTC said excessive pricing was anti-competitive, as it rules out the setting of prices according to recognisable competition considerations.

“In this respect, the commission will not hesitate to embark on investigations in sectors identified as colluding or price fixing or excessively pricing with a view to remedy such anti-competitive practices within the confines of the Act. All producers, wholesalers and retailers are therefore expected to comply with the Competition Act with immediate effect or face the wrath of the law,” said the watchdog.

CTC has also observed the rampant unsupported price increases on goods and services equated to excessive pricing in competition law and policy to the detriment of consumers.

“Excessive pricing is defined as a price for a good or service, which bears no reasonable relation to the economic value or reasonable relation between price and economic value of that good or service and higher than that value.


“Such conduct leaves consumers with no alternative, as all players, producers, wholesalers and retailers charging
excessive prices eliminate the consequent competitive prices for basic goods and services and product associated with a competitive environment,” CTC said.

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4 Comments

  1. Just arrest them and throw away the keys Zimbos understand jail more than anything else no wonder why the cells are packed.

    1. warnings are not enough they know that several warnings come before actual arrests.they are committing crimes so they should be dealt with accordingly or preferably scrap the SI64 instrument so that the overpriced goods and services will not be bought

    2. u want them to be arrested under which charge, there is no law which controls prices, if i charge my bread at $2 and if the consumers buy its ok with me. if they cant it can rot in my shop so what the hullabaloo about arresting someone. in fact urge your stupid thinking govt officials to introduce back subsidies or reopen parastatals which were producing good like csc so that they sell their goods at ridiculously low prices and see if that competition wont force prices downwards. if mealie meal is increased in price, gmb are the first to do so, so how do the govt want to force retailers to reduce prices when they cant direct their own. that same applies to noczim (petrotrade) they are the first to increase fuel prices. so stop posting rubbish here.

  2. We have heard enough of warnings and speeches. We need action!

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