Shoprite store in Lusaka, Zambia. The South African company is Africa's largest supermarket chain. In Zambia, Shoprite is currently investigated by the national Competition Commission.

© Shoprite/afrol News

afrol News, 11 November - Gone are the days when companies operating in Africa could act with impunity when forming cartels or otherwise limit free competition. Regulators are getting active in most countries, as illustrated by a new major case in Zambia.

In Zambia, this week the national Competition Commission announced it is investigating the South African supermarket chain Shoprite in relation to abuse of dominance allegations. Shoprite has 19 stores in Zambia and has allegedly attempted to limit its rival, Pick'n Pay, from entering and expanding in the market by threatening to stop doing business with suppliers who also sell goods to its rival.

According to South African lawyer Rosalind Lake, this latest investigation by the Zambian authorities "demonstrates that South African companies operating in other African jurisdictions are not immune from prosecution in relation to anti-competitive conduct."

"It is worth noting that the Zambian authority is empowered to impose personal liability on directors who are found to have contravened Zambian competition laws," Ms Lake, an associate of Deneys Reitz law firm, tells afrol News.

Indeed, increasing attention is being paid to competition law enforcement in many other African jurisdictions. The majority of African countries now have competition laws and active regulators. These include Algeria, Namibia, Zimbabwe, Cameroon, Egypt, Ethiopia and Ghana.

Many countries that may not yet have their own competition laws are members of the Common Market for Eastern and Southern Africa (COMESA) which has its own rules prohibiting anti-competitive conduct within the common market, Ms Lake says. In addition, COMESA will soon publish financial thresholds for mergers affecting the common market that will require approval before they may be implemented.

"South African companies should be aware that any mergers that will have an effect in other African jurisdictions may require merger clearance from all relevant authorities," according to Ms Lake. "In Namibia in particular, there are no financial thresholds for merger notification and consequently all mergers will require notification and approval before they may be implemented," she adds.

The current high-profiled Zambian investigation follows on the Zambian Competition Commission's probe into the oil sector last year. Both the oil and retail sectors are also currently under investigation by the South African Competition Commission.

According to Ms Lake, competition regulators in the Southern African region "regularly communicate with one another regarding investigations and, as is clear from this latest investigation, the Zambian regulator is focusing on the same sort of industries as those under investigation in South Africa."

"South African companies, who also have operations into other countries in Africa - and particularly those companies currently under investigation by the South African competition authorities - should be extremely wary and ensure that they have received proper legal advice to confirm that their practices comply with the legislation in each country," Ms Lake advises.

By staff writer

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