Original Research

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

W. D. Reekie
South African Journal of Economic and Management Sciences | Vol 1, No 1 | a1824 | DOI: https://doi.org/10.4102/sajems.v1i1.1824 | © 2019 W D Reekie | This work is licensed under CC Attribution 4.0
Submitted: 03 August 2020 | Published: 31 March 1998

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W. D. Reekie, Department of Business Economics, University of the Witwatersrand, South Africa

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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.

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