ZCC bans ‘no return, no refund’ displays
Friday, November 5, 2010, 8:38
THE Zambia Competition Commission (ZCC) has said the new Competition and Consumer Protection Act (CCPC) makes it a punishable offence to display disclaimers such as ‘No Return, No Refund’ in trading places. The CCPC Act No .24 of 2010, which is yet to be operational, prohibits such disclaimers which consumers have complained about.
“Zambia is one of the countries that have a lot of defective products on its market and it has been unfair for traders to deny consumers refunds or exchange even for defective products,” she said.ZCC public relations officer, Vaida Bunda said Section 48 (1) of the Act states that “an owner or occupier of a shop or other trading premises shall not cause to be displayed any sign or notice that purports to disclaim any liability or deny any right that a consumer has under the Act or any other written law.”
In a statement in Lusaka yesterday, Ms Bunda said the commission had within the mandate of the current Act been unable to prevent traders from displaying such disclaimers even where the goods sold were of questionable quality as the law was reactive.
“Zambia is one of the countries that have a lot of defective products on its market and it has been unfair for traders to deny consumers refunds or exchange even for defective products,” she said.
The new law, she said, was more proactive and would make it easier for the commission to handle cases of defective products because traders would be expressly prohibited to display the disclaimers.
The CCPA also makes it a punishable offence to display such disclaimers. The Act states that the person who or an enterprise which contravenes subsection (1) was liable to pay the commission a fine not exceeding 10 per cent of that person’s or enterprise’s annual turnover.
[Times of Zambia]
Labels: CCPA, CONSUMERS, VAIDA BANDA, ZCC
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ZCC writes to SA’s competition body over Omnia, Sasol ‘collusion’ on fertilizer pricing
By Chibaula Silwamba
Wed 23 June 2010, 15:30 CAT
THE Zambia Competition Commission (ZCC) has written to South Africa’s Competition Commission to find out how Omnia and Sasol’s alleged over pricing of fertilizer might have affected the Zambian economy.
According to South Africa Competition Commission, it found that there was a coordinated practice and/or understanding between Omnia, Sasol and Kynoch whereby the price of fertilisers was fixed and maintained at certain levels.
It stated that its investigation revealed that Omnia, Sasol and Kynoch conspired to limit price competition amongst them in order to fix, raise and maintain higher prices of fertilisers as well as to maintain their market share.
The commission stated that these practices amounted to price fixing within the meaning of the Competition Act and are out rightly prohibited.
Sasol admitted the charge and paid a fine, though Omnia and Kynoch continue denying the charge.
When contacted for a comment, Zambia Competition Commission (ZCC) executive director Thula Kaira said fertiliser was a complex business.
“We are aware, I think, it’s public knowledge for those who read international publications that Omnia and Sasol were found to have contravened the competition law of South Africa as they engaged in a cartel in the south African market. So we have been in touch with our colleagues from South Africa to learn from them how they carried out that research investigation and what matters they found out that we could learn from and apply within the domestic economy here,” said Kaira. “As you may be aware Omnia and Sasol do not produce any fertilizer in Zambia but they import from South Africa. So we try to understand from that how that case has any effects, if any, on the Zambian market. So we are still waiting for more information about that from our friends in South Africa.”
The Zambian government has contracted Nyiombo, Omnia and Nitrogen Chemicals of Zambia (NCZ) to supply fertiliser for the 2010/2011 farming season.
The parliamentary Public Accounts Committee (PAC) in March this year questioned the government over the continued awarding of contracts to Nyiombo Investments and Omnia for the annual supply of fertiliser under the Farmer Input Support Programme (FISP).
In response, agriculture permanent secretary Dr Abednigo Banda claimed that the companies had continued getting the contracts for the supply of fertiliser because they met all the tender requirements.
Labels: FERTILIZER, ZCC
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ZCC cautions consumers on defective products
By Fridah Zinyama
Fri 18 Dec. 2009, 04:00 CAT
THE Zambia Competition Commission (ZCC) has cautioned consumers in the country to be cautious of substandard and defective products during this festive season.
In a press statement, ZCC director for Consumer and Public Relations Brian Lingela stated that unsuspecting consumers were normally duped into buying what seemed to be affordable but defective products during this period.
“The Commission reminds consumers that during the festive season, various traders are in the tradition of making several clearance promotions of their goods and it is easy for consumers to rush for such goods in view of the low prices at which they are sold,” he noted.
Lingela observed that in 2009, most of the complaints that the Commission received from consumers were on the sale of defective products.
“Consumers need to ensure that they make up their minds on the quality of products they buy especially electrical and electronic goods,” he cautioned. “During 2009, the Commission has endeavoured to secure refunds and replacements for consumers on assorted goods found to be defective. On two occasions, we have referred unsatisfied parties to the Small Claims Court for further adjudication.”
Lingela advised consumers who might buy defective products to report to the Commission for redress.
“If any consumer buys a product which is defective, they are advised to immediately report to the Zambia Competition Commission offices,” he stated. “The Commission will remain open during the festive season to receive various consumer complaints.”
Lingela further advised the public to shop responsibly during this festive season and ensure that they purchased quality products.
“The Commission, at this time of the season would also like to remind consumers that they have an obligation to shop around and ask the shop owner of the quality and origin of goods before making decision,” stated Lingela. “Further, consumers have an obligation to ask for warranties, guarantees and receipts on purchased goods so that they can be protected whenever they discover defects on purchased goods.”
Labels: CONSUMERS, ZCC
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ZCC requests powers to fine businesses contravening competition, trading Act
By Kabanda Chulu
Wed 02 Dec. 2009, 04:00 CAT
ZAMBIA Competition Commission (ZCC) has stated that it has no powers to impose fines or ask traders to remove the ‘no return, no refund’ notices from their business premises.
Reacting to Consumer Unit Trust Society (CUTS) Zambia coordinator Angela Mulenga who urged the Commission to impose stiffer penalties on traders found wanting, ZCC public relations officer Vaida Bunda yesterday stated that it was not wrong for such notices to be placed in business premises unless they led to misrepresentation of a product quality, quantity or price function.
She stated that in a case where a trader with such notice had been found wanting, the Commission intervened to have the consumer refunded or given a replacement.
“If the trader fails to comply with ZCC, the case is then taken to the small claims court since currently, ZCC has no administrative powers to ask the traders to remove such notices from their business premises nor does it have powers to impose fines on traders found wanting,” Bunda said.
“In the draft bill currently under review and to be tabled before Cabinet and Parliament next year, the Commission has requested for administrative powers to fine businesses contravening the competition and fair trading Act.”
She explained that a ‘no return, no refund’ notice could only raise genuine concern if it was misleading consumers into thinking that even when a product was defective, they could not in any circumstance return it to the trader and claim for a refund or replacement.
“A trader in most cases puts up such notices to discourage consumers from returning the product after finding a similar one at a much cheaper price in a different shop. This then shows that a consumer should shop around before making a purchasing decision,î stated Bunda.
On Monday, Mulenga urged the ZCC and other relevant authorities mandated to safeguard the plight of consumers to mete out stiff punishment on any business house flouting trading practices and violating consumer rights through the ‘no return, no refund’ notices.
Labels: ANGELA MULENGA, COMPETITION, CUTS, ZCC
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ZCC warns supermarkets against selling harmful products
By Fridah Zinyama
Tue 03 Nov. 2009, 04:00 CAT
THE Zambia Competition Commission (ZCC) has warned all supermarkets in the country to desist from selling products that are harmful to health.
ZCC consumer and public relations director Brian Lingela stated that consumer protection in Zambia required concerted effort from all relevant authorities in the country. Lingela urged retailers to remove all expired products and products without expiry dates from their shelves as a matter of urgency before the law caught up with them.
“This is why we collaborated with Kitwe City Council (KCC), Ndola City Council (NDC) and Kabwe Municipal Council (KMC) which are mandated under the food and drugs Act 303 of the Laws of Zambia to enforce the prohibition of sale of foods or substances that are harmful to health,” he stated.
“For products that are about to expire, their prices must be reduced at least two weeks before the expiry date so that both businesses and consumers do not lose out. When such products are reduced, supermarkets are advised to place them in front to ensure visibility to consumers.”
Lingela further stated that the warning also applied to local business people selling in markets and tuntembas as they were not immune to the law.
“As Zambia strives to meet the Millennium Development Goal of attaining a healthy status for all citizens by 2015, we cannot afford to have Zambian consumers consume foods that are likely to cause injury to their health and contribute to an unhealthy nation,” he stated.
Lingela further advised all consumers in Zambia to exercise caution before they purchased any product especially food from any supermarket or shop.
“The public should ensure that they check when the product is expiring and even its quality before they make any purchases,” he stated.”As ZCC, we will continue collaborating with local authorities through out the country in ensuring that consumers are protected from unscrupulous business people whose only interest is to make profits.”
ZCC in collaboration with the three local authorities - KCC, NCC, and KMC - inspected Quicksave Supermarket, Panty Pride, Shoprite outlets, Bippo’s and Upper supermarkets.
“In these supermarkets, we found some food products that had expired, those without expiry dates and food products not labelled in Zambia’s official language - English,” Lingela stated.
“In other cases, we found that there was inadequate labelling thereby making it difficult for an ordinary consumer to know exactly what the product is.”
Labels: BRIAN LINGELA, CONSUMERS, FOOD, ZCC
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ZCC threatens to sue Spar over ‘unfit’ foods
Written by Fridah Zinyama
Thursday, October 01, 2009 1:03:48 AM
ZAMBIA Competition Commission (ZCC) has threatened to take legal action against Spar Zambia if it continues to sell consumable products which have no expiry dates or are unfit for human consumption. The threat comes following a complaint from a consumer who purchased a packet of strawberries from Spar Arcades which were decaying at the bottom of the pack.
At a press briefing in Lusaka on Tuesday, ZCC public relations officer Vaida Bunda said the sale of any food products which were not fit for consumption was against the law.
Section 12 (e) Cap 417 of the Laws of Zambia states that “a person shall not supply any product which is likely to cause injury to health or physical harm to consumers, when properly used, or which does not comply with a consumer safety standard which has been prescribed under any law.”
Bunda said ZCC was mandated under Section 12 of the competition and fair trading Act, Cap 417 of the Laws of Zambia to protect consumers against unfair trading.
“We receive a number of complaints from time to time regarding various goods and services provided within Zambia which consumers are concerned with,” she said.
Bunda explained that after receiving the said complaint from the consumer, ZCC, in collaboration with the public health department of the Lusaka City Council, conducted an on the spot inspection as the public health Act, Cap 295 of the Laws of Zambia empowered the public health department to carry out such checks.
“We inspected Spar Arcades and Spar Downtown and found several food products that either had no expiry dates, were expired, improperly packaged, improperly labelled/branded or had foreign matter contrary to consumer product safety requirements,” she said. “We noted that in some instances, Spar Arcades had two expiry dates indicated on some products and we advised that this was wrong as it had the propensity to mislead consumers contrary to Section 12(d) of the Cap 417 of the Laws of Zambia which provides that ‘a person shall not engage in conduct that is likely to mislead the public as to the nature, price, availability, characteristics, suitability for a given purpose, quantity or quality of any products or services’.”
Bunda added that the inspection team further noted that the storage facilities for bread were not in a good state as debris was found on the bread stored in the shop.
“The products found wanting were seized and management at both branches was warned that the Commission would prosecute them should this practice continue,” she said.
Bunda warned businesses engaged in the habit of selling expired products or products that were likely to cause injury or harm to consumers to stop the practice immediately.
“ZCC has taken this inspection as a warning and if they fail to adhere to the warning, we will take legal action,” she said.
Bunda encouraged Zambian consumers to always be wary of expiry dates and ensure that they only purchased products that were fit for human consumption.
Labels: CONSUMERS, FOOD, SPAR ARCADES, ZCC
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ZCC optimistic over enactment of consumer protection bill
Written by Florence Bupe
Monday, September 21, 2009 4:46:24 PM
THE Zambia Competition Commission (ZCC) has expressed optimism that the enactment of the Competition and Consumer Protection Bill will address the inadequacies in the provision of consumer protection in Zambia.
ZCC consumer and public relations director Brian Lingela stated that the institution was in support of the Bill as it would help strengthen the legal framework governing consumer affairs in the country.
“The Zambia Competition Commission welcomes President Rupiah Banda’s announcement that government will be introducing a Competition and Consumer Protection Bill in Parliament soon to strengthen the legal framework governing competition and consumer protection in Zambia,” he stated.
Lingela observed that the current competition and fair trading Act Cap 417 of the Laws of Zambia was inadequate in providing comprehensive consumer protection.
He expressed contentment that the Bill, which was already in an advanced stage, would come to fruition and help improve the consumer protection environment in the country.
“We are impressed that this process has actually already reached an advanced stage, as the Ministry of Justice is working on a draft in readiness for submission to Parliament by the Minister of Commerce. This will result in the amendment and subsequent replacement of the competition and fair trading Act,” he stated.
Lingela hoped that the new law would give legal powers to ZCC to mete out punishment to offenders, as opposed to the current system where the commission relied on courts.
“The court process has a tendency to take long before consumers derive benefits. We also envisage that the commission will have powers to seize and destroy defective goods after consultation with relevant statutory boards,” he stated.
Once the new law is enacted, ZCC is set to be renamed the Zambia Competition and Consumer Commission (ZCCC).
Labels: BRIAN LINGELA, CONSUMERS, ZCC
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ZCC nods National Breweries, Trade Kings deal on Maheu
Written by Chiwoyu Sinyangwe
Monday, August 31, 2009 3:41:27 PM
THE Zambia Competition Commission(ZCC) has approved National Breweries’ purchase of the Maheu business of Trade Kings Limited. ZCC director for consumer and public relations, Brian Lingela, stated in a press release that the approval was conditional, in that National Breweries Limited should not engage in anti-competitive pricing to eliminate potential competitors in the Maheu product market.
“The board recognised that while it was not in the interest of expanding the base of entrepreneurship by prohibiting Trade Kings to sale its Maheu brand in order to raise capital for its steel and other projects in Zambia,” Lingela stated. “ZCC will activate a vigilant monitoring system to ensure that the merged company does not frustrate new entrants through abuse of its dominant position.”
Lingela also stated that although the transaction had the potential to raise competition concerns in the Maheu product market through creation of a monopoly, the competition status quo remained substantially the same as there was already a de-facto monopoly in the sector.
Trade Kings held 98 per cent of the total market share for Maheu in the country while National Breweries, a subsidiary of Heinrich Syndicate held an insignificant 2 per cent.
“The board observed that the same market arrangement is likely to remain after this transaction and further entrenchment of dominance will not arise because entry costs into Maheu production were low and the market was fertile for any prospecting entrants,” stated Lingela.
And commenting on the transaction, ZCC executive director Thula Kaira said it was unfortunate that most transactions the Commission considered were of a big scale and went beyond the ambit of an average Zambian business individual or company in terms of the kind of price tags on businesses that were up for sale.
In the Maheu business case, the amount was US $20m.
Kaira said this transaction was a balancing act between a willing seller and a willing buyer and that in the absence of an alternative offer, ZCC could not stop Trade Kings from exiting the market for any reason.
“Since National Breweries is listed on the Lusaka Stock Exchange, we hope ordinary Zambians will be interested to buy shares as a way of participating in the shareholding,” said Kaira.
Labels: COMPETITION, NATIONAL BREWERIES, TRADE KINGS GROUP, ZCC
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‘Zain, MTN shouldn’t participate in Zamtel shares purchase’
Written by Chiwoyu Sinyangwe
Tuesday, August 18, 2009 2:51:53 PM
ZAIN Zambia Plc and MTN Zambia should not participate in the purchase of 75 per cent Zamtel shares to allow the entry of another company, Zambia Competition Commission (ZCC) stated yesterday. Commenting on the pending sale of three quarters of the country’s biggest Information Communication Technology (ICT) company, ZCC stated that the entry of a new player would enhance competition in Zambia’s telecommunication sector.
ZCC stated that it supported the partial privatisation of Zamtel, observing that the move was expected to enhance efficiency and effective competition in the telecommunication industry.
“We envisage enhanced competition in the telecommunications sector should we have a new entry through the partial privatisation,” ZCC director for Consumer and Public Relations, Brian Lingela was quoted in the official press statement.
“We would like to see another independent company other than MTN or Zain take over the assets of Zamtel as this will greatly increase competition in the telecommunication sector.”
And ZCC stated that state owned companies in a fast changing telecommunication sector would always offer little competition because they were protected by government and received subsidies, conditions that did not foster a competitive spirit in the management of such companies.
“ZCC also expects that once Zamtel operates as a competitive business, it is likely to result into lower tariffs for consumers and increased coverage particularly for Cell Z subscribers,” ZCC stated.
“Over the past few years, for example, Cell Z, a Zamtel subsidiary has remained a ‘sleeping giant’ and has not been aggressive in expanding its coverage to most rural and urban areas. This situation has provided insignificant competition to other providers such as Zain and MTN. In its current state, the company would have to exit the telecommunication market if it operated within a competitive environment to the detriment of consumers.”
ZCC also urged the government to revise laws governing the telecommunication sector in order to ensure that all companies operating in the sector were placed on an equal footing for effective competition to occur.
Labels: COMPETITION, MTN, PRIVATISATION, ZAMTEL, ZCC
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Exploitation of small-scale farmers worries Commodity Task Force
Written by Florence Bupe
Wednesday, July 01, 2009 3:37:09 PM
THE Commodity Task Force has complained that
millers were allegedly exploiting small-scale farmers in the grain marketing exercise. And the Food Reserve Agency (FRA) has explained its present absence in the maize purchasing exercise, saying this is as a result of
high moisture content in maize.
During a discussion with the Zambia Competition Commission (ZCC, Commodity Task Force chairperson Maxwell Mulondiwa complained that millers were exploiting small- scale farmers by buying their maize for as low as K50,000 per 50 kilogramme bag instead of the recommended price of K65,000 as announced by the FRA.
He called on the ZCC to ensure that unfair trade was curbed during the maize marketing exercise.
“Grain traders and millers have ganged up and are paying as little as K50,000 for 50 kilogrammes of maize. Small-scale farmers have no bargaining power and are being exploited with the blessing of the Ministry of Agriculture and Cooperatives,” Mulondiwa charged. “This is a violation of the fair trading Act.”
He challenged ZCC to investigate what he termed as a curtail among the millers and grain traders aimed at exploiting the small-scale farmers.
Mulondiwa said better policies needed to be instituted to protect farmers from exploitation. And in response, ZCC executive director Thula Kaira acknowledged that the problems affecting the crop marketing season this year were huge.
“This year, the problem of crop marketing has become big. FRA hasn’t bought a single bag of grain from the farmers, and they’re selling their produce at very low prices out of desperation,” Kaira said. “The absence so far of FRA in the crop purchasing exercise has given way to briefcase buyers to exploit the poor farmers.”
But FRA food reserve and marketing coordinator Philip Kabwe insisted that FRA had not yet started buying maize grain from small-scale farmers because the grain moisture content was still high.
He also explained that the K65,000 floor price was just a guide for the farmers to peg their produce prices, but that it was not binding for other players in the market.
“Our price as FRA is K65,000 per 50 kilogramme bag of maize, but it should be understood that we have other players in the market. We are planning to buy 110,000 metric tonnes of maize this year, but we will only move in to purchase the maize grain once the moisture content has come down to the stipulated 12.5 per cent, and this will be any time this month (July),” said Kabwe.
Labels: COMMODITY TASK FORCE, FARMERS, FRA, MAXWELL MULONDIWA, THULA KAIRA, ZCC
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ZCC authorises Illovo Sugar to buy Nanga Farms shares
Written by Nchima Nchito Jr
Saturday, June 13, 2009 3:22:05 PM
ZAMBIA Competition Commission (ZCC) board of commissioners has granted a conditional final authorisation for the proposed acquisition of 85.7 per cent shares in Nanga Farms Plc by Illovo Sugar.
ZCC executive director Thula Kaira stated in a press release that the board at a special meeting held on June 10, 2009 determined that the authorisation was the right course to take in the absence of alternative buyers for Nanga Farms.
“While the advantages for Zambia Sugar Plc to control Nanga Farms were self-evident, the board were of the view that the proposed acquisition of 85.73 per cent shares in Nanga Farms Plc to Illovo Sugar (Zambia) Limited/Zambia Sugar Plc was likely to adversely affect competition in the relevant markets for sugar cane and sugar, in which markets Zambia Sugar held dominant positions of market power,” he stated
“The transaction was thus to further enhance Zambia Sugar’s market power through the absolute control of the raw material supply source at Nanga Farms. The Board also noted the absence of import competition for sugar cane and the fact that the withdrawal of Zambeef Plc from Nanga Farms robbed the market of a possible future independent sugar mill competitor to Zambia Sugar Plc, which sugar mill was expected to take advantage of the Nanga Farms sugar cane source.”
Kaira, however, noted that while the commission was alive to the fact that while granting an authorisation would entrench Zambia Sugar Plc’s monopoly control of the sugar industry in Zambia, there had on the other hand not been any alternative offer to the purchase of the shares and the Commission could not unduly stop an exiting shareholder from divesting their interest.
Kaira added that in light of the foregoing, the commission resolved to grant authorisation subject to several conditions.
“Zambia Sugar Plc or any of its affiliate companies shall not enter into any agreements with any domestic or foreign business or government, which agreement prevents, restricts or distorts competition in the sugar or related sectors in Zambia,” he stated “Zambia Sugar Plc or its affiliate companies shall not prevent, restrict or distort other would be investors in the sugar industry from engaging in sugar cane supply contracts with any independent sugar cane growers in Zambia.”
He stated that in addition, Zambia Sugar Plc or its affiliate companies was not expected to engage in abuse of dominant position of market power including, but not limited to, excessive pricing of sugar in the local market.
Kaira stated that Zambia Sugar Plc or its affiliate companies was expected to sign a compliance agreement with ZCC to finalise the authorisation process and show how the company intended to ensure compliance with the conditions of the authorisation.
Labels: ILLOVO SUGAR, NANGA FARMS, THULA KAIRA, ZAMBIA SUGAR COMPANY, ZCC
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Competition law and state-owned firms
Written by Andrew Kashita
Thursday, May 28, 2009 2:56:18 PM
I refer to the story of May 19, 2009 in which the executive director of the Zambia Competition Commission (ZCC) is reported to have announced the proposals to lift the exemption of state-owned companies from the application of the competition and fair trade act, 1994.
I was saddened and disappointed to see this claim, 15 years after this law was put on the statute book. There is nowhere in the Act where the exemption is conferred on state-owned companies.
The preamble itself states: "to encourage competition in the economy by prohibiting anti-competitive trade practices; to regulate monopolies and concentration of economic power; to protect consumer welfare; to strengthen the efficiency of production and distribution of goods and services.
The definition of a monopoly is " a dominant undertaking ...which produces, supplies, distributes or otherwise controls not less than half of the total goods of any description that are produced, supplied or distributed throughout Zambia or any substantial part of Zambia...". The same goes for services.
The quoted section 3(f): "...activities expressly approved or required under a treaty or agreement to which the Republic of Zambia is a party" has been misconstrued by the ZCC.
By common understanding, a ‘treaty’ or ‘agreement’ to which the government is a party means treaties or bilateral agreements with other countries or protocols and those signed with such bodies as the United Nations, African Union or SADC. These are the bodies in which other countries are signatories, and they rarely deal with trading organisations.
The Act deals with trading organisations in which the government has joint investments with other countries being trading entities which have provisions for dealing with revisions of operating (i.e. trading) charges and there are not many of these. The examples are TAZARA and charges at bridges such as Sesheke crossing into Namibia; at Kazungula when the bridge is built but not the present pontoons to and from Botswana. TAZARA also faces competition on the road throughout its length.
There are no treaties or agreements with other countries in respect of Zesco, Zamtel, Zambia Railways or even Cell Z which are all trading companies.
These companies and other activities are not exempted from the Competition Law.
The report went on to say that ZCC can only recommend to the minister in respect of state-owned companies flouting the law. This is incorrect.
Under the minister incorporation Act, in this capacity, the minister holds shares, bonds or other instruments on behalf of the government but he also as a shareholder, has powers to sue and be sued. His actions under this Act bind his successors, i.e. the government.
It is sad to see such a misunderstanding and misinterpretation of the law.
He said "we have no mandate to punish those who abuse the law but to recommend...to the government". This is wrong.
Section 14(1) authorises the executive director to obtain a court warrant to enter premises, access the books of accounts or other documents relating to the trade or business... and the taking of the copies of an such books of accounts or other documents.
Anyone aggrieved by the action of the executive director of ZCC may appeal to the High Court and the Supreme Court.
Person is defined to include companies, associations, partnerships, etc. With regard to prosecutions, section 16 (1) says "any person who:-
a) contravenes or fails to comply with any provision of this Act...or any directive or order lawfully given or any requirement lawfully imposed under this Act....
(b) omits or refuses to furnish any information when required to do so,
(c) refuses to produce any documents when required to do so, or
(d) knowingly furnishes any false information to the Commission....
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding K10 million or imprisonment for a term not exceeding five years or both.
Most Acts now contain references to "penalty units" to deal with the varying kwacha value. But this has nothing to do with the principal claim that ZCC has no power to take action against state-owned companies.
Before concluding this discourse, let us refer to the announcement by the Cotton Association of Zambia and the Zambia Cotton Ginnery Association of a uniform price per kilogramme to be paid to the cotton farmers. This follows what are referred to as lengthy deliberations by various representatives numbering at least eleven. This appeared in the Times of Zambia of May 20, 2009 on page 15.
The price is what will be paid to the growers and clearly contravenes Part III: Anti Competitive Practices etc, section 7 (1) "Any category of agreements, decisions and concerted practices which have as their objectives, the prevention, restriction or distortion of competition to an appreciable extent in Zambia... are declared anti-competitive trade practices and are thereby prohibited".
Specifically, section 7(2)(g) colluding, in the case of monopolies of two or more manufacturers, wholesalers, retailers, contractors, suppliers of services, in setting a uniform price in order to eliminate competition..." is prohibited.
The only time ZCC is required to get the approval of the minister is in sections 13 and 17 when regulations are required to be made governing; (a) anything which under this Act is required or permitted to be prescribed; (b) any forms necessary or expedient for the purposes of this Act; (c) any fees payable in respect of any service provided by the Commission; (d) such other matters as are necessary or expedient for the better carrying out of the purposes of this Act.
In conclusion, the ZCC claim is false. The requirement to extend the penalty or fine beyond K 10 million is a routine matter which the government dealt with long before now. ZCC has a primary duty to protect consumer welfare. No state-owned trading company in Zambia is exempt from obeying the competition and fair trade Act. what is missing is enforcement by ZCC.
Labels: ANDREW KASHITA, MONOPOLIES, PARASTATALS, ZCC
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Competition law and state-owned firms
Written by Andrew Kashita
Tuesday, May 26, 2009 1:56:00 PM
I refer to the story of May 19, 2009 in which the executive director of the Zambia Competition Commission (ZCC) is reported to have announced the proposals to lift the exemption of state-owned companies from the application of the competition and fair trade act, 1994.
I was saddened and disappointed to see this claim, 15 years after this law was put on the statute book. There is nowhere in the Act where the exemption is conferred on state-owned companies.
The preamble itself states: "to encourage competition in the economy by prohibiting anti-competitive trade practices; to regulate monopolies and concentration of economic power; to protect consumer welfare; to strengthen the efficiency of production and distribution of goods and services.
The definition of a monopoly is " a dominant undertaking ...which produces, supplies, distributes or otherwise controls not less than half of the total goods of any description that are produced, supplied or distributed throughout Zambia or any substantial part of Zambia...". The same goes for services.
The quoted section 3(f): "...activities expressly approved or required under a treaty or agreement to which the Republic of Zambia is a party" has been misconstrued by the ZCC.
By common understanding, a ‘treaty’ or ‘agreement’ to which the government is a party means treaties or bilateral agreements with other countries or protocols and those signed with such bodies as the United Nations, African Union or SADC. These are the bodies in which other countries are signatories, and they rarely deal with trading organisations.
The Act deals with trading organisations in which the government has joint investments with other countries being trading entities which have provisions for dealing with revisions of operating (i.e. trading) charges and there are not many of these. The examples are TAZARA and charges at bridges such as Sesheke crossing into Namibia; at Kazungula when the bridge is built but not the present pontoons to and from Botswana. TAZARA also faces competition on the road throughout its length.
There are no treaties or agreements with other countries in respect of Zesco, Zamtel, Zambia Railways or even Cell Z which are all trading companies.
These companies and other activities are not exempted from the Competition Law.
The report went on to say that ZCC can only recommend to the minister in respect of state-owned companies flouting the law. This is incorrect.
Under the minister incorporation Act, in this capacity, the minister holds shares, bonds or other instruments on behalf of the government but he also as a shareholder, has powers to sue and be sued. His actions under this Act bind his successors, i.e. the government.
It is sad to see such a misunderstanding and misinterpretation of the law.
He said "we have no mandate to punish those who abuse the law but to recommend...to the government". This is wrong.
Section 14(1) authorises the executive director to obtain a court warrant to enter premises, access the books of accounts or other documents relating to the trade or business... and the taking of the copies of an such books of accounts or other documents.
Anyone aggrieved by the action of the executive director of ZCC may appeal to the High Court and the Supreme Court.
Person is defined to include companies, associations, partnerships, etc. With regard to prosecutions, section 16 (1) says "any person who:-
a) contravenes or fails to comply with any provision of this Act...or any directive or order lawfully given or any requirement lawfully imposed under this Act....
(b) omits or refuses to furnish any information when required to do so,
(c) refuses to produce any documents when required to do so, or
(d) knowingly furnishes any false information to the Commission....
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding K10 million or imprisonment for a term not exceeding five years or both.
Most Acts now contain references to "penalty units" to deal with the varying kwacha value. But this has nothing to do with the principal claim that ZCC has no power to take action against state-owned companies.
Before concluding this discourse, let us refer to the announcement by the Cotton Association of Zambia and the Zambia Cotton Ginnery Association of a uniform price per kilogramme to be paid to the cotton farmers. This follows what are referred to as lengthy deliberations by various representatives numbering at least eleven. This appeared in the Times of Zambia of May 20, 2009 on page 15.
The price is what will be paid to the growers and clearly contravenes Part III: Anti Competitive Practices etc, section 7 (1) "Any category of agreements, decisions and concerted practices which have as their objectives, the prevention, restriction or distortion of competition to an appreciable extent in Zambia... are declared anti-competitive trade practices and are thereby prohibited".
Specifically, section 7(2)(g) colluding, in the case of monopolies of two or more manufacturers, wholesalers, retailers, contractors, suppliers of services, in setting a uniform price in order to eliminate competition..." is prohibited.
The only time ZCC is required to get the approval of the minister is in sections 13 and 17 when regulations are required to be made governing; (a) anything which under this Act is required or permitted to be prescribed; (b) any forms necessary or expedient for the purposes of this Act; (c) any fees payable in respect of any service provided by the Commission; (d) such other matters as are necessary or expedient for the better carrying out of the purposes of this Act.
In conclusion, the ZCC claim is false. The requirement to extend the penalty or fine beyond K 10 million is a routine matter which the government dealt with long before now. ZCC has a primary duty to protect consumer welfare. No state-owned trading company in Zambia is exempt from obeying the competition and fair trade Act. what is missing is enforcement by ZCC.
Labels: PARASTATALS, ZCC
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Govt won't allow importation of mealie meal - Mutati
Written by Kabanda Chulu
Tuesday, April 28, 2009 3:56:57 PM
GOVERNMENT will not allow the importation of mealie meal into the country, claiming that prices will stabilize soon due to the harvest of early maize crops.
Last week, the Zambia Competition Commission suggested that government should allow the importation of mealie meal to help reduce prices since the Millers Association of Zambia (MAZ) were operating like a cartel, hence exploiting consumers through excessive pricing of mealie meal.
But commerce minister Felix Mutati has said the importation of maize through the Food Reserve Agency (FRA) was enough to cater for the deficit.
He said government also wanted to utilize the existing local capacity of millers, who were creating jobs and making money to re-invest in the country.
"It will not make sense to import mealie meal especially that there is brand loyalty, for instance, others just eat mealie meal from Choma Milling but if we import, we may create apprehension and people will resist since there will only be stocks of 'xyz' brands," said Mutati.
"Also when we import mealie meal, people will lose jobs and there will be need to import by-products like stock feeds, so where are we going to end? An importer of finished products and yet we have the capacity but soon there will be some early maize harvest and by next month many other farmers will come on board to correct the situation."
Despite the importation of thousands of metric tonnes of maize by the FRA, which they later subsidized to members of MAZ, mealie meal prices in the country are still high with a 25 kilogramme bag of breakfast costing at an average of K70,000.
This development prompted the Competition Commission to ask government to allow imports so that prices could come down in order to protect Zambian consumers and to afford buyers a wider choice for the products.
Labels: FELIX MUTATI, MAZ, MEALIE-MEAL, ZCC
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Chiwala urges competition in trade
Written by Kabanda Chulu
Monday, April 20, 2009 4:30:49 AM
ZAMBIA Competition Commission (ZCC) board chairman Bernard Chiwala has said there is need to enhance competition since it takes out inefficiencies and promotes best possible freedoms of trade.
Officially opening a media workshop last Thursday under the theme ‘Understanding the work of ZCC and its role in economic development’, Chiwala, who cited Proverbs chapter 11 verse six, accused company directors in developed nations of being greedy and financially immoral.
“The global economic crisis is not as a result of financial failure but of moral failure and greediness by directors in the developed world and in the book of Proverbs 11verse six, the Bible tells us that ‘the righteousness of the upright will deliver them but the unfaithful will be caught by their lust. So this is exactly what is happening in the economies of the Western world. Unfortunately, everyone has been affected because of their greediness when executing business decisions,” Chiwala said. “But we need competition and fair trading because it seeks out best possible freedoms of trade practices.”
And explaining the mission and vision of the ZCC, board vice-chairman Chance Kabaghe said Zambia needed to encourage fair trading and prohibit the existence of cartels and abuses of dominant positions in the market.
Kabaghe said in a liberalised economy, no country could escape the effects of anti-competitive practices originating within and outside its borders.
“Competition law has become critical in developing countries and transition economies due to the adoption of the free markets economy where there is always the risk of replacing state monopolies with private ones,” said Kabaghe.
“In this regard, we need to encourage competition and encourage fair trading by prohibiting anti-competitive practices, regulate monopolies and concentrations of economic power, prohibit the existence of cartels and abuses of dominant position as well as providing for consumer protection.”
Labels: BERNARD CHIWALA, ZCC
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Mutati urges ZCC to form regulatory framework for consumer protection
Written by Chiwoyu Sinyangwe
Friday, January 23, 2009 6:56:22 AM
COMMERCE minister Felix Mutati has urged the Zambia Competition Commission (ZCC) to come up with a regulatory framework for consumer protection by the end of this year.
And Mutati has announced
a reduction of between 33 to 80 per cent in trade licence fees under the trading Act, a move he said would help to reduce the cost of doing business in the country.
Speaking when the European Union handed over eight operational vehicles worth K875 million to three statutory bodies under the commerce ministry for capacity building, Mutati said in the current scenario of private sector led economy, it was important that consumer interests were protected through a regulatory framework.
The statutory bodies that received the vehicles included Zambia Bureau of Standards, Zambia Competition Commission and the Zambia Weights and Measures Agency.
Mutati said the three statutory bodies were vital in promoting and regulating trade in the country and creating a conducive environment for businesses to thrive.
“Beyond merely looking after the vehicles, there is need for my friends from these bodies to scale up efforts for improving service delivery,” Mutati said. “For my colleagues at ZCC, your strategic plan needs to come out this year. The critical legal framework for safeguarding interests of consumers needs to come out this year.”
And announcing the downward revision of the trade licence fees during a press briefing later on, Mutati urged the local authorities in the country to implement the revised licence fees in a professional manner.
Mutati also stressed that the government did not expect local authorities in the country to suffer revenue losses as the licenses prescribed under the trades licenses Act were not meant to collect revenue but to regulate conduct of trade.
He also announced that the reduced licence fees issued under the trade licenses Act cap 393 came into effect on December 22, 2008.
“It has come to our attention that some council officials are sometimes overzealous in collecting the fees and end up harassing people. This is simply unacceptable,” said Mutati. “It is my sincere hope that stakeholders will co-operate with the local authorities in the implementation of the statutory instrument.”
Labels: CONSUMERS, FELIX MUTATI, LICENSES, REGULATION, ZCC
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ZCC welcomes sugar imports
By Joan Chirwa and Chiwoyu Sinyangwe
Friday June 06, 2008 [04:00]
ALLOWING imports of sugar in a convenient manner will assist in addressing interests of consumers on the local market, Zambia Competition Commission (ZCC) acting executive director Thula Kaira has said. And Shoprite and Spar have received consignments of sugar with a two kilogramme being sold at an average of K9,000.
Kaira in an interview said the government could find a way of allowing imports of sugar while protecting its own industry.
“In our view, allowing imports of sugar in a controllable way could address the interests of consumers,” Kaira said. “Again, allowing imports should not have adverse effects on the local market. We need to come up with long-term solutions to certain situations, not only when there is a crisis. In the current situation where there is a shortage of sugar, it was important for Zambia Sugar, as a monopoly supplier to notify consumers so that government can find ways of mitigating the deficit.”
Kaira further said the commission had received numerous complaints from industrial users of sugar on inadequate supply of the commodity.
“In the circumstances, it would appear plausible that imports should be encouraged as there is no stringent requirement that industrial sugar be fortified with Vitamin A at the point of entry,” Kaira said. “On the other hand, it would be critical for Zambia Sugar not to lose its domestic market for commercial sugar. To ascertain this, there would be need for assurances from Zambia Sugar that they would favourably satisfy local demand.”
And by Wednesday afternoon, Shoprite and Spar had stocked both brown and white sugar on their shelves.
Workers at Shoprite confirmed that one-kilogramme packets of sugar were received on Tuesday night while the two kilogramme packets were stocked on Wednesday. And a check at Spar Arcades revealed that the chain store had enough stocks of sugar, although demand for the product was not much.
“We are not having many people coming to buy sugar because they don’t know we have it in stock,” said one of the shop attendants at Spar Arcades.
Zambia Sugar on Monday announced that it would soon flood the market with its products so that sugar prices could get back to their original trading levels of K8,500 per two kilogramme packet. The shortage of sugar on the local market resulted in an inflation of prices to an average of K20,000 per two kilogramme packet.
Labels: SUGAR CANE, ZCC
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Zim churches call for peace ahead of runoff
By George Chellah in Harare, Zimbabwe
Monday May 26, 2008 [04:00]
THE Church in Zimbabwe has called for peace in the country ahead of the June 27 presidential election runoff. And the Church has condemned the xenophobic attacks in South Africa, saying that it was disturbed with the unfolding events in that country. In an interview on Sunday, chairman of the Christian Heads of Denominations in Zimbabwe, a composition of church leaders from the Evangelical Fellowship of Zimbabwe (EFZ), the Zimbabwe Catholic Bishops’ Conference (ZCBC) and the Zimbabwe Council of Churches (ZCC), Dr Goodwill Shana appealed for peace and stability in Zimbabwe.
“As a church we would like to see peace in the country and we are concerned… that’s why with what is coming (presidential runoff) we have to bring a positive resolution to what is happening,” he said.
Dr Shana said the three Church mother bodies were currently mobilising women countrywide.
“We are launching the women’s national prayer task force. We are mobilising a Christian community of women because they are multiple victims of any national turmoil or instability. When a nation is in turmoil the most vulnerable people are women and children,” Dr Shana said. “That’s why we have to mobilise our women across the political divide because a mother is a mother whether she is ZANU-PF or MDC especially in times when there is violence and instability.”
There has been widespread political violence in the countryside with both rival parties accusing each other of perpetrating the heinous acts of violence against their supporters.
Several civil society groups in Zimbabwe and Amnesty International have accused ruling ZANU-PF supporters of violent acts since the March 29 harmonised elections, where MDC leader Morgan Tsvangirai emerged victorious ahead of the veteran leader.
But on Friday, Zimbabwe Republic Police (ZRP) spokesperson Chief Superintendent Oliver Mandipaka told the state media that police in the eastern border town of Mutare arrested 12 opposition MDC activists on public violence charges.
He said the 12 activists where arrested after police received a tip-off from members of the public.
Mandipaka said the police were informed that the perpetrators were using marked and unmarked vehicles to terrorise people in the communities.
“They would go and perpetrate the acts of violence and retreat to their hidden bases, which we are still to establish,” he said.
The police swung into action barely a week after President Mugabe accused the opposition MDC of launching an evil crusade of dividing the nation on political lines through heinous acts of political violence.
And Dr Shana condemned the xenophobic attacks in South Africa, stating that the Church was disturbed with the unfolding events in that country.
“We are very concerned and disturbed with what’s happening there. But we are encouraged with the across the board condemnation by the country, from the government, civil society and the Church,” he said.
Meanwhile, the Zimbabwean government announced on Friday that it would help to repatriate its citizens that were victims of xenophobic attacks that had rocked South Africa.
The Ministry of Foreign Affairs issued a statement indicating that the Zimbabwean embassy in Pretoria and the consulate in Johannesburg would also assist with returning the bodies of those killed in the attacks.
Labels: EFZ, ZCC
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ZCC implores state to introduce economic zones in rural areas
By Times Reporter
THE Government should introduce Multi Facility Economic Zones (MFEZ) in rural areas so as to reduce the problem of rural urban drift. Zambia Competition Commission (ZCC) acting executive director, Thula Kaira, said this when he appeared before the parliamentary committee on economic affairs and labour, chaired by Zambezi East MP, Charles Kakoma (UPND).
He said MFEZ should be located in both rural and urban areas as that would entail the country’s economy growing at the same rate.
He said currently, the economic growth was concentrated in urban areas but that the trend would change once MFEZ were introduced in as many rural areas as possible.
“There is need to have a holistic national industrial and commercial development policy that stimulates and creates wealth even in firms outside the MFEZ, more so the micro, small and medium scale enterprises who are the backbone of any economy,” Mr Kaira said.
Much as the commission was in support of the establishment of MFEZ, Mr Kaira said that precautionary measures ought to be undertaken so that these do not act as bottlenecks in the economy.
He said if not handled properly, MFEZ would prevent, restrict or distort the growth and development of the general industry in Zambia.
Mr Kaira said that before establishing the MFEZ in rural areas, Government should take into account the comparative advantage of the particular area.
At the same time, Mr Kaira implored the Government to revitalise industries that were outside the line of rail such as Mansa Batteries, Kawambwa Tea Company, the pineapple canning industry in Mwinilunga and the cashew nut and rice industries in Mongu among others.
He said concentrating the MFEZ in urban areas was a disservice to the economic development of the country.
“Infact some companies operating outside the MFEZ may fail to compete and exit the market. This frustrates the efforts of developing Zambia and, therefore, hinders the creation of seed bed companies that would be corporations tomorrow,” Mr Kaira said.
Mr Kaira said that MFEZ should operate like they did in other countries where they run side by side with what were known as virtual zones.
Labels: CHARLES KAKOMA, MFEZ, ZCC
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Consumer body cries for 'teeth'
By Joan Chirwa
Wednesday March 19, 2008 [03:00]
ZAMBIA Competition Commission (ZCC) has been inactive in enforcing existing laws due to the absence of punitive measures against offenders, commission director for consumer welfare and education Chilufya Sampa has said. In an interview, Sampa said the major problem that the competition commission has had in terms of enforcing consumer laws was the non-existence of punitive measures, as the current court process was time-consuming and costly on the part of the commission and consumers.
“If we need to take someone to task, we have to go through the courts but that is not effective. We have used advocacy instead and we have not taken anyone to court over the last 10 years,” Sampa said. “We have come to realise that this is a weakness on the part of the competition commission for not being able to take people to task over various complaints that we receive from consumers around the country.”
Sampa noted the need for the amendment of the Consumer and Fair Trading Act for it to be more effective in terms of enforcement of the laws.
“The current court processes take so long, so this is why we have just been using advocacy methods in dealing with complaints on products from the consumer. This method is however not the best, but it is quicker compared the court process,” Sampa said. “Because of the absence of punitive measures, we have a number of companies coming out in consumer complaints every now and then. We are now even thinking of just taking some of these companies to court even if the process takes long and is an expensive venture.”
The competition commission last year handled a total of 62 consumer cases on misleading information, deceptive products and foreign particles in foodstuffs, among others.
Labels: CHILUFYA SAMPA, CONSUMERS, ZCC
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