Competition ‘red flags‘in horse mackerel sector

Competition ‘red flags‘in horse mackerel sector

WALVIS BAY – The Namibian Competition Commission is investigating some horse mackerel harvesting vessel owners and companies for alleged abuse of dominance through unfair pricing.

The commission alleges these companies are acting unfairly as they negotiate horse mackerel quota fees with fishing rights holders, but set non-negotiable prices for the governmental objective quota auction.

This practice, according to NaCC, imposes unfair prices and trading conditions.

The investigation comes a month after the fisheries and finance ministries announced their plans to auction 13 584 metric tonnes (MT) of horse mackerel and 1 000 MT of monkfish to the highest bidders. 

NaCC spokesperson Dina //Gowases stated last Friday that the commission noted that in the 2020 government auction, the reserve price was N$3 000 for the freezer quota, and N$750 for the wet quota for the 2021 to 2023 period. The reserve price has since been increased to N$3 500 for the freezer quota, and N$850 for the wet quota for the 2024 fishing season.

“However, various fishing companies that own vessels are allegedly imposing unfair purchase prices when negotiating quota usage fees with fishing rights holders without vessels in the horse mackerel sub-sector. These companies have participated in the auction since its inception by purchasing quotas at the set reserve price without negotiation through closed bidding tender documents. Simultaneously, they negotiate quota usage fees to be paid to the fishing rights holders before concluding quota usage agreements,” //Gowases said in the statement.

The assessment of various quota usage agreements submitted to the commission indicates that the companies imposed lower quota usage fees on fishing rights holders, well below the minimum government reserve price, instead of matching them or offering more.

She added that the commission believes that, due to these companies’ practice of negotiating horse mackerel quota usage fees with fishing rights holders while offering non-negotiable prices to the government at auction, they are engaged in potentially anti-competitive conduct by imposing unfair purchase prices on fishing rights holders.

“They are possibly contravening Section 26(1) by directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions,” she stated.

As a result, on 6 June, the NaCC resolved to initiate a second investigation into the fishing sector.

According to //Gowases, the commission has identified 11 fishing companies that harvest horse mackerel, 128 rights holders, 20 joint ventures without vessels, and 20 operated vessels in the horse mackerel sector. Furthermore, the commission has also identified approximately 10 fishing companies that operate or charter horse mackerel vessels in Namibia.