- National retail chains are killing competition in the market with exclusive leases negotiated in shopping malls
- This comes as the Competition Commission Inquiry into Grocery Retail published its findings
- The probe has established that bigger players have managed to muscle out smaller businesses
The Competition Commission Inquiry into Grocery Retail has called for the end of exclusive leases.
The probe found that national retail chains would negotiate with shopping malls and effectively close the market for smaller players.
This had denied small-, medium- and micro-enterprises access to potential customers, preventing historically disadvantaged entrepreneurs from participating in the economy.
Over 500 submissions were received and 800 discussions held saw the findings published on Monday, reports IOL.
Panel chair Halton Cheadle called for the end of exclusive agreements with immediate effect:
“The inquiry recommends that this is achieved through voluntary undertaking by the national supermarket chains, a process that the inquiry has initiated, but not finalised. The recommendation is that the commission should within six months from today continue the inquiry's process and secure voluntary compliance with the recommendations. Failing which, legislation in the form of regulations or a code of practice should be introduced along the lines of the recommendations."
Cheadle said that malls were the most popular shopping venue for citizens, with 70% of the 2 000 South African centres found to have entered into these exclusive agreements.
Alarmingly, these agreements cover long periods of time, some spanning 20 years while others persist for 40, Briefly.co.za gathered.
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