Commission probing malls and big supermarket chains

The Competition Commission has confirmed that it is investigating anti-competitive behavior and collusion in malls across South Africa.

Itumeleng Lesofe, Competition Commission spokesman says they are conducting an inquiry into the South African grocery retail sector. The inquiry was prompted by a number of complaints received by the Commission against shopping malls developers and supermarkets chains.

The main concern is the exclusive lease agreements that are concluded between the national supermarket chains and mall developers.

Itumeleng Lesofe, spokesperson of the Commission

Lesofe says the exclusive lease allows the supermarkets to be anchor tenants of the mall and be given rights to supply groceries at specific malls for long periods.

These agreements mean there will be no competition between supermarkets at specific malls and these affect small businesses as they wont be able to operate in certain malls to supply groceries in competition with some of these big supermarkets.

In terms of competition law this often creates problems because where there is no competition, consumers suffer.

Itumeleng Lesofe, spokesperson of the Commission

If there is no competition, firms don't often see the need to be efficient and innovative and this also has a negative impact on prices paid by consumers.

Itumeleng Lesofe, spokesperson of the Commission

Listen to the full conversation below:

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