A view on the treatment of collusive and restrictive practices in competition policy

Abstract

South African competition policy is in a state of flux. While professing to serve so-called national interest, legislation has tended to overlook the principles of economic efficiency and consumer welfare. The South African National Drug policy is a case in point. The best defence against collusion and restrictive practices in business is competition, but the Department of Health favours blanket rules like uniform pricing and a fixed fee-for-service. Thus supermarkets may not employ dispensing pharmacists, and uniform price legislation would make it illegal to negotiate discounts on prescription medicines with retailers. As a rule consumers are the losers. Many fallacies are contained in the debate on the "right" competition policy for South Africa. For example, a firm may appear big simply because the domestic market is small.