/ 22 July 2013

SAB abused its monopoly, says economic expert

Sab Abused Its Monopoly, Says Economic Expert

The Competition Commission's economic expert Simon Roberts said on Monday that South African Breweries (SAB) had different pricing for different regions, and prices differed between the urban and rural areas. 

Roberts – who quoted from a variety of sources, including SAB's annual results and presentations – spoke of a document, saying the pricing talked about "determining what the market can bear".

Roberts said information showed that regional bases charged different prices. He said SAB abused its monopoly in the beer market.

So different was the pricing for beer that it led to "runners" – identified by SAB as distributors who would buy from cheaper regions and bring them in to the more expensive regions in order to make a profit.

He said SAB was charging as much as it thought it could in some regions and using that to balance out other areas.

The tribunal is hearing complaints brought to the Competition Commission in 2004 by group of liquor wholesalers and retails. 

Roberts said SAB had favoured a few licenced distributors, giving them discounts, while treating independent distributors as retailers and charging them the prices they would charge retailers. 

This meant independent distributors could not pass on any savings or make any profits. 

Non-competitive practices
The case has had a long history, with the hearing originally starting in August 2010 but was delayed to March 2012. 

A dispute around jurisdiction saw it being referred to the Competition Appeal Court which ruled that the tribunal had the right to hear the case.

SAB has denied its practices are non-competitive.

Once Roberts has given evidence, the tribunal will hear from SAB-appointed distributors and other witnesses.

The hearings are set to take place until August 16.