1. Draft Bill

The Eswatini Competition Commission (“ESCC”) published a Competition Bill, 2020 (“Draft Bill”) on its website, which is intended to be presented to the Minister of Commerce, Industry and Trade. The object of the Draft Bill is to increase effectiveness, consistency, predictability and transparency in the enforcement and administration of competition law in Eswatini. It also aims to give effect to regional frameworks, such as COMESA Competition Regulations and international best practices. The Draft Bill, once promulgated into law, will provide for:

• the prevention of anticompetitive trade practices;
• the establishment of a more effective and efficient merger review and control regime;
• better coordination with sector-specific regulators;
• the promotion of competition in the national economy;
• the promotion of fair trading and consumer protection;
• the imposition of fines, penalties and sanctions;
• clarity on the powers, duties and functions of the Eswatini Competition Commission;
• the establishment of the Competition Tribunal;
• repeal of the Competition Act, 2007; and
• other incidental matters.

To the best of our knowledge, the Draft Bill has yet to be signed into law.

2. Penalty Guidelines

The ESCC further published guidelines to assist it in imposing appropriate administrative penalties (“Penalty Guidelines”), which will ensure that it uses a consistent and fair process. According to the Penalty Guidelines, the ESCC has a discretion on whether to take into account certain aggravating factors listed under regulations to the Eswatini Competition Act. In the event that the ESCC does consider these factors, it must take into account all the identified factors to maintain uniformity in penalty setting.

The identified aggravating factors should be weighted in order to objectively set a value. There must be consideration for mitigating factors and the principle of proportionality. There should also be base penalties (i.e., the lowest penalty percentage or starting point for a penalty) and there should ultimately be a formula to assist the ESCC on how it will arrive at a specific figure for a penalty.

The ESCC will consider the following mitigating factors:

a) the role of the enterprise, for example, that the enterprise was acting under duress or pressure;

b) the fact that the alleged offender has not been the subject of previous enforcement action on similar conduct;

c) whether the alleged offender is willing to accept lesser enforcement options e.g., giving undertakings or entering into a consent agreement; and

d) the level of cooperation with the ESCC in expeditiously concluding its investigation.

In terms of the Penalty Guidelines, the ESCC may proportionately reduce the penalty imposed in cases where a company is facing commercial challenges, where there was a lesser degree of harm to the market or where continued existence of a company serves the public interest by ensuring that there is a viable and effective competitor in the market. The ESCC may only consider using the principle of proportionality after the calculation of the administrative penalty.

The Penalty Guidelines set the base penalty for cartel activity and abuse of dominance at 1% of the turnover of the infringing firm. In relation to anticompetitive trade practices, consumer protection infringements and implementation of mergers without notification, the base penalty is set at 0.5% of the infringing firm’s turnover. The Penalty Guidelines further contain a formula for penalty calculation, including a scorecard for mitigating and aggravating factors.

3. Market Definition Guidelines

On 20 April 2021, the ESCC published guidelines on market definition (“Market Definition Guidelines”) to ensure that market definition is not glossed over by the ESCC if it is not challenged on the efficacy of its relevant market analysis; to prevent investigators from using their personal views in an analysis instead of judicially defensible methodology; and as a guideline for its new staff.

The Market Definition Guidelines adopts international best practices for market definition, such as defining markets from the product side and geographical point of view; recognising that markets are all unique and these unique market features are what make markets distinct from other markets and enable market players to act or strategize differently for different markets; and adopting international best practice for product and geographic definition and analysis.

In January 2019, the ESCC published its findings on the Retail Banking Market Inquiry, which analysed the state of competition in the banking industry, following public concerns regarding prices for banking services in the country.

The ESCC also published its Draft Report on the Broiler Chicken Market Inquiry, which revealed that:

• there are no significant barriers to entry, aside from the fact that new prospective entrants will have to face inherent costs of start-up and doing business in this market;
• there is a 27% levy imposed on broiler chicken meat and some broiler chicken meat products imported from outside the Southern African Customs Union countries. Furthermore, there is 15% value added tax imposed to all poultry imports, including processed meat. The ESCC was concerned that these levies limit import competition and competition in general, and recommended that they be lowered for processed broiler chicken meat products in order to encourage import competition;
• members/shareholders of Kikilikigi (one of the three major firms in the broiler growing market) are prohibited from selling shares to non-members/non-shareholders. According to the ESCC, this conduct may be anticompetitive as the shares are not openly sold to the public and as such, the prohibition forecloses new entrants into the market. The ESCC recommended that Kikilikigi should desist from compelling existing shareholders to sell their shares to existing shareholders only;
• contract growers are mostly shareholders of the processing firms, where they produce and supply processing firms according to set quotas, which are mainly proportional to their shares. They also supply the live market with chickens. According to the ESCC, the practice of contract growing is not unique to Eswatini as it is applied in other countries such as Brazil, Zimbabwe, Zambia and South Africa. The ESCC made no recommendations in this regard; and
• the slaughtering and processing market is oligopolistic as it has only three players that have the capacity to supply the whole nation with broiler chicken meat and products, although small abattoirs exist, who supply small restaurants, schools and individual customers in small communities. The ESCC found that there are no significant barriers to entry into the slaughtering and processing market.

We are not aware of any such confirmation from the ESCC.

We are not aware of any such confirmation from the ESCC.

The ESCC has not publicised any information in relation to dawn raids since January 2019.

Yes. In March of 2020, the Deputy Prime Minister published Coronavirus Regulations, 2020 (“COVID-19 Regulations”). The COVID-19 Regulations facilitate various issues that are incidental to the COVID-19 pandemic, including the regulation of prices, unfair practices and the supply of goods during the pandemic.

1. Price control

The price control provisions of the COVID-19 Regulations prohibit firms from implementing price increases that are detrimental to consumers, particularly where:

• the price does not correspond, or is not equivalent, to the increase in the cost of providing that good or service;
• the new price increases the net margin or mark-up on that good or services, above the average margin or mark-up for that good or service; or
• the offer to supply, or enter into an agreement to supply any goods or services at a price that is unfair, unreasonable or unjust.

2. Unfair Practices

This provision prohibits suppliers from:

• engaging in undesirable conduct, including the use of unfair tactics when marketing their goods or service and when supplying goods or services to a consumer; and
• offering to supply, or enter into agreement to supply any goods and services at a price that is unfair, unreasonable or unjust.

3. Supply of goods

In terms of this provision, suppliers are required to develop and implement reasonable measures to:

• ensure reasonable and equitable access of goods to customers, which may include limiting the number of items which a consumer may purchase; and
• maintain adequate supply of stock.

Where there are restrictions on the purchase of supplies, suppliers are required to prominently display a notice in their outlet pertaining to such restrictions.

The ESCC has not publicised any information on cases that it has finalised in relation to a breach of the COVID-19 Regulations. However, the ESCC has issued notices to businesses, cautioning them to desist from anticompetitive behaviour during the COVID-19 pandemic. The ESCC has been particularly concerned with excessive pricing during the COVID-19 pandemic, and has stressed the penalties that businesses will incur if found to have engaged in unfair trading practices.

In April 2021, the ESCC launched an investigation into a price increase by Dups Funeral Home and Cremation (Pty) Ltd, after the funeral home announced that it would be charging an additional fee for all COVID-19 related deaths.

We are not aware of any such cases.

No.

The Retail Banking Market enquiry identified the Retail Banking Market as oligopolistic with only five players.

The Broiler Chicken Market enquiry concluded that there are only three major firms in the broiler growing market.