Dawn raider is consumers' white knight

Now the spotlight has fallen on perhaps the biggest target of all. The big food retailers are under investigation for anti- competitive behaviour that the country hopes will explain why food prices continue to go up.

No matter what happens to the currency, interest rates, the fuel price, transport costs, the price of tin or fertiliser, whether they go up or down the prices on supermarket shelves rise inexorably.

The retail bosses say they're squeaky clean. Is Ramburuth calling them liars?

“We've announced an investigation,” he says carefully. “We haven't come to any conclusions yet.”

Would he make such an announcement without convincing evidence?

“When we do this we make sure we're on solid ground.”

He makes the point that this is not an overnight thing. Over a period of at least two years they've received “reports” from a variety of sources, including the milk producers.

He acknowledges that they would have a good reason for wanting to blame someone else in the value chain.

But his team of lawyers and economists have done their own research, he says, and there has been a mass of anecdotal evidence.

That may be so, but we're talking about people like Pick n Pay chairman Raymond Ackerman here. They're highly respectable members of the community, aren't they?

“I'm sure they are,” he says, deadpan.

Well then, these pillars of society have sworn very publicly that they have never fixed prices?

“Fair enough. We're not suggesting the four CEOs sit down in a smoke-filled room to fix prices. What we're saying is, we have grounds for investigating practices that dampen competition.”

While Dave Lewis, the outgoing head of the Competition Tribunal, has probably been the most public face of the competition authorities, Ramburuth, 45, might well have the more stressful job.

He's the one who initiates the inquiries that, if successful, go to the tribunal for the sentencing of the culprits. But if they're not, he risks being left with a lot of egg on his face.

Competition lawyers are eager to have a go at him and his team, particularly if they represent the interests of executives and companies fingered by the commission.

They've become very “aggressive” lately, complains one. They've mounted at least six dawn raids in the last year. How over-the-top is that?

Not more aggressive, counters Ramburuth. Just smarter.

“We signalled two years ago that we were going to work more smartly, prioritise things wisely. Look at issues that affect people broadly. What you're seeing now is a lot of that work coming to fruition.”

And the dawn raids? Are they really necessary?

“It's not something we do lightly. It's something we do when it is necessary. We can't do this without a court order. We have to convince a judge that it is necessary.”

He denies allegations that the commission alerts the media beforehand.

“Menzie Simelane (his predecessor) made that mistake a long time ago,” he says. The victim, a cement company, took the commission to the high court, which slated it for sensation-seeking and ordered the return of the documents it had seized.

Although he thinks the law might be more sympathetic now, he is not about to put that to the test.

“We tell the media the day after a raid, because that is part of our accountability to the public.”

Another lawyer complained that the commission is too open to abuse by companies that use the process to stymie competitors.

“A far bigger problem is companies frustrating our processes to get away with it,” says Ramburuth. “To delay and prolong. ”

What is his opinion of competition lawyers?

“Our constituency is the businessman, not the competition lawyer,” he says. “That's the behaviour we want to change.”

Another criticism is that amendments proposed to the Competition Act by competition authorities are unconstitutional.

Specifically, an amendment that would make chief executives criminally liable for price-fixing, tender-rigging (a few tender- rigging cases in the construction industry linked to infrastructure projects are under investigation, remarks Ramburuth) and other forms of collusion.

Would he like to see them behind bars?

“It's been said often enough that the one thing that will focus the minds of CEOs is the prospect of going to jail.”

They do in the US, which is why De Beers executives were so terrified of setting foot there for so long. So why not here?

“Until now it's been more important for us to get rid of the anti-competitive practice so that going forward there will be higher levels of competition. But this presupposes a level of good faith among CEOs in addressing the problems that are uncovered that is not always there.”

Is the prospect of a 10%-of-revenue fine not enough of a deterrent?

“By some accounts it would appear not. Companies budget for that eventuality and pay the fines.”

Another complaint is that the commission is following a “pro-poor” agenda to please its new political masters.

“Of course we are following a pro-poor agenda. We don't apologise for that.”

But it has nothing to do with politics. “It's to do with making an institution like this relevant to the society we live in.”

Ramburuth comes from Durban, where he was a medical student in the early 1980s before political activism got the better of his studies. He migrated to Wits, where he did a degree in biochemistry before working on HIV/Aids at the SA Institute of Medical Research.

He then became the facilitator for trade and industry policy-making at Nedlac, where he facilitated the agreement on competition policy principles.

He says he does not find the job unduly stressful but does “sometimes feel that the expectations on us are too high”.

Not at all. We just want to know we're going to be paying less.

He sighs.

Source: Business Times

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