By Milton
Shaanika-Louw
It seems it will take longer to have our baby than it took to count the election votes.
As part of my baby preparedness, I took my wife to the recently opened new mall in the south east of Windhoek. It was a pleasant surprise to see so many brand name stores and one look at the prices of items made me appreciate the value of competition.
In one toy store I was able to buy a present for our 11 year elder son for less than N$200.00. The exact same toy is available from local toy stores and large retailers for more than twice the price.
Thus, I look forward to the continuing decline of prices as we see more competition in the market place. This now leads me to a conundrum – a confusing and difficult problem or question. If competition is good for me as a consumer when prices drop, when will it be bad for me?
As a previous promoter of trade for Namibia at the United Nations Industrial Organisations office in Paris, France, we often complained about competition against our local businesses that forced them to go out of business.
Many a time I heard the argument we needed to defend our Namibian industries and business against “unfair” advantage and tactics used by especially South African businesses. The examples are numerous where the power of size was used by such companies, for example cooking oil, toilet paper, foam mattresses, and others.
In recent months, I have approached both sides of the argument on “protecting local industry”. The two commodities referred to are fresh milk and chicken.
The suppliers argue that they need protection from the outside producers because they only have a small market, and the large producers can afford to flood the market. They also warn that non-protection would lead to job losses.
But consumers argue quite rightly that when there is competition, prices will come down and prevent monopolies from increasing their profit margins without due regard to the consumers.
Having been on both sides of the “game”, I must now take a stand. Do I believe in market forces keeping prices affordable or do I believe in protecting jobs? Wrong!
That is not the actual question. We need to look at the industries concerned on an individual basis and then come to some recommendation.
The dairy industry used to consist of many lcoally-based producers supplying to dairies. For example, in Rehoboth the farmers supplied their milk to the locally owned dairy.
At Independence there were two main large dairies and they kept the market in balance. However, these two consolidated and became almost a monopoly. This large size entity meant they could use business tricks to get rid of competitors or put them into a position of having to either sell or close down their businesses.
Today, this is the largest dairy and if I am correct, only dairy in the country. They even have their own super-farm to provide products to themselves.
This large company now wants to continue the production of the dairy products otherwise there will be loss of jobs and it is important to grow the Namibian economy, they argue.
I disagree. This monopolistic attitude is causing harm to our consumers and should not be allowed to continue. The Ministry of Trade and Industry must not bow down to demands from large companies crying “infant protection” when they are neither infants nor protectors of the small and medium business owners in this country.
* Milton Shaanika-Louw is a consumer activist and prolific blogger on consumer protection issues (http://milton-louw.blogspot.com). He serves as a voluntary director at the Namibia Consumer Protection Group.