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- Amid looming food and fuel shortages, new, temporary regulations have been implemented that will allow suppliers of essential goods to openly share information with each other about inputs, stock levels and demand for products.
- In normal times, this would be seen as collusion and anti-competitive behaviour.
- But government says it’s necessary to prevent critical shortages.
In response to looming shortages in food and fuel due to the unrest in KwaZulu-Natal and Gauteng, government has adopted temporary new regulations that will allow companies to openly share information with each other.
In normal times, this kind of information-sharing could potentially be seen as collusion and anti-competitive behaviour, but the Department of Trade, Industry and Competition says that the regulations are necessary to prevent critical shortages of essential goods in the country.
The Competition Commission was consulted in the drafting of the regulations.
The new regulations will allow all companies involved in the supply of essential goods – including basic food and consumer items, fuel, medicine and emergency clean-up products – to share information about which businesses can supply different areas, and where they see demand for certain goods.
They are also allowed to coordinate their distribution of essential goods to different areas, and can further share information about their own stocks or capacity, to determine where there will be shortages of essential goods.
Moreover, companies are now allowed to work together to allocate inputs for the production of goods to different companies, in an effort to reduce shortages of these products. They can also transfer these goods from one company to another.
They can coordinate the distribution of these essential goods to different areas, “in order to ensure an equitable distribution of essential goods across the country to consumers, and especially poorer households, and customers, including small businesses”.
But the regulations say that companies are still not allowed to fix prices, or even discuss the pricing of essential goods and the pricing of inputs used in the production of essential goods.
The firms remain subject to the National Disaster Management Regulations, which limits price increases on essential goods.
The new regulations will remain in place until, at least 15 August.