On Thursday, the Competition Tribunal announced a R16 million fine for Uniplate, a company that manufactures and distributes number plate blanks and embossing machines (which, used together, create usable number plates).
The Tribunal found that Uniplate abused its market dominance with contracts that – astonishingly – had no termination clauses, tied customers into exclusive deals for up to 10 years, and didn’t allow customers who bought Uniplate embossing machines to buy their blanks from another vendor.
The SA economy is absolutely riddled with this kind of behaviour. Because it is small and because of historical restrictions on business creation and ownership, in industry after industry, one or two dominant firms use their power to completely shut out competition. This raises prices, lowers employment, and actively harms SA’s growth. Capitalism only works in competitive markets. Oligopolies and monopolies just make us all poorer.
It’s encouraging to see the Tribunal punishing Uniplate for its strategy of relying on onerous contracts, rather than fair pricing and quality products, to hold onto its market share. If this type of anti-competitive guff could be stamped out everywhere, SA would have a real chance to grow and thrive.
