Tembinkosi Bonakele Commissioner of the Competition Commision speaks to media during press conference held at their offices, 13 June 2017, Pretoria. Picture: Jacques Nelles
The Competition Commission handed over its first Economy Concentration Tracker Report that measures concentration and participation in 178 markets, as well as levels and trends over the past five to ten years in the South African economy to Minister of Trade, Industry and Competition, Ebrahim Patel.
The year-long study used data collected by over 80 industry organisations, regulators and government departments, as well as data from SARS, Stats SA and the commission itself. It was recently served before Cabinet and recommends how persistent concentration and lack of participation can be addressed through more coordinated competition policy and law enforcement.
The report, which will be added to every two years, includes agriculture, retail, forestry, health care services, financial services, media, energy, property, gambling and construction, as well as the automotive and airline industries.
It investigates the origins of concentration in South Africa’s economy as a direct result of the concentrated “market structure from the Apartheid era” which the commission says left the country with an economy characterised by excessive levels of concentration of ownership and control, as well as a lack of participation.
ALSO READ: No more exclusive supply agreements for school uniforms
The study was done to provide the basis for more strategic enforcement and policy around concentration in the economy and assist the commission and other spheres of government in making informed decisions to address concentration and broader participation in the economy in numerous ways, including:
ALSO READ: Competition Tribunal imposes strict conditions on sale of Burger King
According to James Hodge, chief economist of the commission, market concentration in sectors such as agriculture, chemicals, finance, banking, insurance, fibre internet and transport are worrying, with low participation by small enterprises.
Small and medium enterprises make up 95% of all enterprises and create jobs for 38% of the work force, but only contributes 24% of the value of tax-paying enterprises compared to industrial countries where the figure is 50 to 60%.
The top 10% of companies contribute 86% of the turnover, compared to only 1.6% of the total turnover of the bottom 50%.
Tembinkosi Bonakele, the Competition Commissioner, said the commission will act against concentration in the economy.
Download our app and read this and other great stories on the move. Available for Android and iOS.