BY MISHMA CHAKANYUKA
THE Competition and Tariff Commission (CTC) has urged business to desist from recommending minimum and maximum price ranges as that kills market competiveness.
In a statement, CTC said the initiative taken by market players was being done as a disguise of cushioning consumers from corrupt retailers, but the commission sees it as a platform for operationalising cartels.
“It has come to the attention of the commission that some producers and/or manufacturers are publishing recommended price ranges within which retailers/wholesalers must trade their goods/services, in the guise of cushioning consumers from likely exploitation by unscrupulous retailers,” read the statement.
“Players in the downstream, namely retailers and wholesalers, can construe the recommended price ranges as the minimum and maximum prices at which the goods can be sold in the market, disadvantaging consumers.”
“While price ceilings can be viewed as a mechanism to protect consumers from exploitation by unscrupulous retailers, the same cannot be said of recommending minimum prices to be charged on goods and services, given the likely anti-competitive effects that arise from such initiatives.”
CTC said floor-price setting acts as a discouragement for efficient operators and innovators as failure to charge the lowest possible price defeats the whole essence of promoting competition and enhancing customer welfare.
The setting of minimum prices for goods and services is prohibited by the Competition Act (Chapter 14:28), which views this as an unfair business practice.
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“Section 42 Unfair Business Practices (1); The Act omissions specified in the First Schedule shall be unfair business practices for the purposes of this Act. (3) Any person who enters into or engages in or otherwise gives effect to an unfair business practice shall be guilty of an offence and liable – a) in the case of an individual to a fine not exceeding level twelve or to imprisonment for a period not exceeding two years or to both such fine and imprisonment; and b) in any other case to a fine not exceeding level fourteen,” read part of the statement.
This comes after the Grain Millers Association of Zimbabwe has recommended prices for flour, rice and salt. The association has been dispatching price monitors to retail shops across the country.
The CTC is a statutory body that administers the Competition Act (Chapter 14:28), mandated to promote and maintain fair competition in all sectors of the economy.
