CCRED Quarterly Review

EXCESSIVE PRICING IN THE GLOBAL PHARMACEUTICAL INDUSTRY

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.

THE IMPORTANCE OF ACCESS CONDITIONS IN VERTICAL MERGERS: VEHICLE ASSEMBLY IN KENYA

THE IMPORTANCE OF ACCESS CONDITIONS IN VERTICAL MERGERS: VEHICLE ASSEMBLY IN KENYA

On 29 August 2017, the Competition Authority of Kenya (CAK) approved with conditions the proposed acquisition of Associated Vehicle Assemblers Limited (AVA) by Simba Corporation Limited (Simba Corp). The approved merger sees the acquisition of an additional 50% of the shares in AVA which were previously controlled by Marshalls East Africa Limited (Marshalls).

HEINEKEN DEVELOPING A TASTE FOR LOCAL CRAFT BREWERS

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.

CARTELS INVESTIGATED IN SOUTH AFRICA: POSSIBLE IMPACT IN THE REGION?

CARTELS INVESTIGATED IN SOUTH AFRICA: POSSIBLE IMPACT IN THE REGION?

Most countries in Southern Africa are net importers of products from South Africa and are therefore likely to be subject to South African cartels. Imports from South Africa cut across sectors including food, capital equipment, construction materials, energy, plastics and chemical products. Moreover regional markets are closely linked through the presence of South African companies in the rest of the region. This article expands on an earlier article in this Review on the possible impacts of some of the South African cartels on the region, as part of CCRED’s monitoring of competition case developments and the evolution of enforcement in the region.

EXCLUSIONARY ABUSE IN THE ROOIBOS LIMITED CASE

EXCLUSIONARY ABUSE IN THE ROOIBOS LIMITED CASE

The local rooibos market in South Africa comprises 8 large processing firms which account for approximately 90% of the market, with Rooibos Limited controlling 60% of the market. Similar to other processing firms, Rooibos Limited purchases large quantities of tea from commercial farmers and processes it into bulk tea which is subsequently sold to packaging firms to pack into finished products. A case against Rooibos Limited has recently been referred to the Competition Tribunal alleging exclusionary abuse of dominance in contravention of section 8(d)(i) of the Competition Act.

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

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.

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

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.