By: Nghiinomenwa-vali Hangala
The country’s Competition Commission is asking the public, especially entrepreneurs, to come out and give evidence on Rani Trading and six major Fast-Moving Consumer Goods (FMCG) suppliers on alleged anti-competitive behavior.
This is after the Commission revealed that it has decided to pursue and investigate Rani Traders Close Corporation (trading as Rani Group of Companies) and six major FMCG suppliers following complaints from Micro, Small and Medium Enterprises (MSMEs) alleging restrictive business practices.
The Commission indicated that whoever has been affected or experienced the exclusionary behaviour as a result of Rani Trading activity and the six suppliers is invited to come forward with evidence.
“Any person in Namibia, aggrieved by the alleged conduct are invited to approach the Commission to submit information in relation to this investigation,” the Commission stated.
The watchdog explained that their investigation follows complaints from independent MSME retailers who allege that Rani and the 6 FMCG are engaged in conduct that may substantially lessen competition.
The MSMEs’ allegations are on five issues which are centered on supply.
The first allegation is a refusal to supply. On this, MSMEs allege that suppliers frequently have no stock available for independent retailers, as stock is reportedly bought out or reserved for Rani Group before production takes place.
“Where stock is available, MSMEs claim they are charged higher prices than those offered to Rani Group,” the Commission was told.
Secondly, the MSMEs have indicated that they have encountered unfavourable payment terms from the main FMCG suppliers.
While MSMEs previously enjoyed up to 30-day payment arrangements with suppliers, they allege this practice has been phased out, and they are now required to make upfront payments
Stating that the new payment has created significant cash flow difficulties.
They also stated that they are excluded from discounts and rebates.
“MSMEs allege that due to the large volumes purchased by the Rani Group, suppliers provide discounts and rebates that are unavailable to smaller retailers, giving Rani Group a significant competitive advantage,” the Commission said.
Furthermore, they are also allegedly experiencing predatory pricing.
The complaints suggest that MSMEs are forced to purchase stock from the Rani Group at wholesale level.
After the purchase, research is conducted on their locations and subsequently establishes retail outlets nearby, “making it difficult for local retailers to compete with their own supplier.”
Moreover, there is foreclosure and “killer acquisitions.” MSMEs allege that these practices place them at the verge of closing down, forcing them to sell their businesses to the Rani Group or shut down entirely.
Section 23 of the Competition Act prohibits agreements or practices that prevent or substantially lessen competition through price fixing, market control, or applying dissimilar conditions to equivalent transactions.
While Section 26 prohibits abuse of dominance, including imposing unfair trading conditions, limiting market access, and applying dissimilar conditions to equivalent transactions.
There has been an observed reduction in local minimarkets and buyout of historical minimarkets, with many of them now occupied by Rani Trading, starting with the northern regions.
