Cosatu condemns price fixing 12-02-08

 

COSATU condemns price-fixing

The Congress of South African Trade Unions has noted with anger that the Competition Tribunal is to prosecute several pharmaceutical companies for price fixing.

Following the conviction of Tiger Brands for bread price fixing, and the forthcoming prosecution of eight companies on charges of fixing the price of milk, a pattern is emerging of widespread collusion throughout South African business.

COSATU agrees with the anonymous ‘leading competition lawyer’ who is quoted in the media as saying that it was “increasingly difficult not to believe that collusion was endemic within corporate South Africa”. This perception is reinforced by the fact that Tiger Brands is involved in both the bread price case and now, through a subsidiary company, the pharmaceutical price fixing scandal as well.

The so-called “free-market” economy is being exposed as a sham, in which companies do not compete freely against each other but are embroiled in conspiracies to carve up the market, rob the consumers by forcing them to pay over the odds and making fabulous profits for themselves.

The main victims are always the most vulnerable in society. With bread and milk price-fixing it is the poor, who spend a much higher proportion of their income on such basic foods. Now it is the sick, who are being exploited by having to pay higher prices for medication which they cannot do without. Those in medical aid schemes do not escape, since the schemes are bound to pass on the excessive prices they are paying for pharmaceuticals to their members in the form of higher subscriptions.

COSATU repeats its demand that if these pharmaceutical companies are found guilty of collusion and price-fixing, it will not be sufficient punishment to fine the companies, since that can be absorbed into their operating costs and passed on to the very consumers they have been fleecing. The individual company directors must be made to pay, and the companies must be obliged to reduce their prices, so as to refund their excess profits back to the consumers they stole them from.

COSATU welcomes the statement by Trade and Industry Minister, Mandisi Mpahlwa, that government is to strengthen competition legislation this year - to allow the state to deal with anti-competitive outcomes in a more vigorous and pro-active manner, to strengthen the Competition Commission and the Competition Tribunal so they can get more involved in investigations and create space for greater intervention where necessary.

We also applaud his plan to target import parity pricing – where local producers of commodities force consumers to pay prices at international, or import levels.

COSATU is organising a meeting with the Competition Commission, which will explore ways in which we can work together to defeat anti-competitive practices. We shall urge the Commission to extend its investigations into every corner of the economy, to root out this cancer which is destroying the integrity of the whole of the South African business community and inflicting huge burdens on those least able to resist – the poor and the sick. They can be sure of COSATU’s support.

Patrick Craven (National Spokesperson)

Congress of South African Trade Unions

1-5 Leyds Cnr Biccard Streets

Braamfontein, 2017

P.O. Box 1019

Johannesburg, 2000