Notice of an investigation into alleged restrictive practices in the medical sector by CIMAS Medical Aid Society in Zimbabwe

IT is hereby notified in terms of section 28 of the Competition Act [Chapter 14:28] that the Competition and Tariff Commission (hereinafter called the “Commission”) has commenced an investigation into an alleged restrictive practice, as defined in terms of section 2 of the Act, by Cimas Medical Aid Society. Section 28 of the Act empowers the Commission to undertake an investigation into any restrictive practice which the Commission has reason to believe exists or may come into existence.

It is alleged that Cimas Medical Aid Society (“Cimas”) deregistered Family Medical Clinic from the New Health 263 direct payment system. It is further alleged that, apart from the deregistration of Family Medical Clinic from the New Health 263 direct payment system, Cimas is neither reimbursing its members nor honouring claims for treatment of its members at Family Medical Clinic. Deregistration of Family Medical Clinic from New Health 263 direct payment system resulted in Cimas members having to pay cash for treatment at Family Medical Clinic. The Commission established that Cimas is a medical aid society which also operates a clinic in Masvingo, Cimas Clinic. Cimas is alleged to be indirectly referring its members to its own facility, Cimas Clinic.

The Commission has preliminary concerns that the alleged practice may result in members’ choice of healthcare being limited to Cimas Clinic and other healthcare providers preferred by Cimas where their medical aid cards are accepted. The practice may also create barriers into entry and expansion of Family Medical Clinic and other deregistered healthcare providers who may not compete fairly with healthcare providers that are paid by Cimas in real time using the New Health 263 direct payment system. The alleged practice may prima facie constitute a restrictive practice as defined in terms of section 2 of the Act.

It should be noted that the commencement of an investigation neither pre-supposed that the conduct being investigated is anti-competitive not that Cimas has violated the provisions of the Act. The Commission will, in accordance with the provisions of section 28 of the Act conduct an investigation in the medical sector focusing on the provision of medical aid services to determine whether the alleged practices directly or indirectly restrict competition.

Any interested person may submit written representations to the Commission stating how they have been affected by the issues under investigation, not later than 14 days from the date of publication of this Notice. Emails may be sent to director@competition.co.zw and/or enquiries@competition.co.zw or hard copies submitted to the Director, Competition and Tariff Commission, 23 Broadlands Road, Emerald Hill, Harare, Zimbabwe.

Any further enquires or clarification on any aspect of the Commission’s investigation may be directed to Mr. T. Mawundike, on Tel (+263) 773385035 or (+263) 853127-32, or email: tmawundike@competition.co.zw

CTC receives 7 merger applications… sets tough conditions for Bikita Minerals, Sinomine deal

THE Competition and Tariff Commission (CTC) received seven merger applications for approval during the third quarter of last year from the manufacturing, finance, insurance, agriculture and mining sectors.

These transactions, contained in the latest CTC report, include Lafarge Cement Zimbabwe’s purchase by Fossil Mines, the acquisition of Ndoro Microbank Bank by InnBucks, the purchase of Fifty-Four Plymouth Road by Surjay, and the purchase of Macro Enterprises by Crail Enterprises.

The commission also received merger applications involving the purchase of Charles Stewart Day Old Chicks by Shanksville Farming, the purchase of Annunaki Investments by Shanksville Farming and the purchase of Bilboes Gold by Caledonia Mining Corporation.

The acquisition of Bikita Minerals by Sinomine (Hong Kong) Rare Metals Resources Co, and the indirect acquisition of Zuva Petroleum by Tristar Transport LLC were also completed during the period under review.

The commission granted conditional approval for Sinomine (Hong Kong) Rare Metals Resources Co to acquire Bikita Minerals during the quarter. The commission was informed in February 2022 that Africa Minerals (Afmin) and Amzim Minerals Limited (Amzim) would be fully acquired.

Afmin and Amzim control 70,3% and 29,7%, respectively, of the issued share capital of Zimbabwe-based lithium mining business Bikita Minerals (Bikita Minerals). Sinomine is a wholly owned subsidiary of Sinomine Resources Group Co (Sinomine Group), a Chinese provider of mining services.

Through its subsidiaries, it engages in geotechnical services, the development of mineral properties, and the exploitation of rare light mineral resources (lithium, cesium and rubidium).

The CTC set various requirements before approving the US$180 million transaction between Bikita Minerals and Sinomine (Hong Kong) Rare Metals Resources Co.

It mandated that, if it is economically feasible, Bikita Minerals, its subsidiaries, affiliates, and successors-in-title sell lithium concentrates to any user who may be available in Zimbabwe on non-discriminatory terms and conditions.

Additionally, the company was instructed to commit to producing high-purity lithium from lithium concentrates within five years of obtaining the commission’s ruling.

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https://www.newsday.co.zw/business/article/200005965/ctc-receives-7-merger-applications-sets-tough-conditions-for-bikita-minerals-sinomine-deal

CTC sets tough conditions for Capri deal

THE Competition and Tariff Commission (CTC) has directed Zimbabwe Stock Exchange-listed conglomerate, Innscor Africa Limited, to divest from Capri within six months for its deal with Annunaki Investments to be approved.

“The commission reviewed its decision subject to the condition of divesture. Considering this, the final decision of the commission was that: The acquisition by Annunaki Investments (Pvt) Ltd of an indirect interest in Capri be approved on condition that Innscor Africa Limited completely divests from Capri within six months of receiving the commission’s decision; the penalty paid of $848 464,48 for consummating the merger without approval of the commission, be maintained,” CTC said in its latest newsletter.

In February 2020, CTC received a notification of a merger involving Annunaki Investments and Innscor’s appliance manufacturing unit, Capri.

The merger was an acquisition of a 25% stake in Capri by Annunaki. Annunaki is an investment vehicle, wholly-owned by SSCG Africa Holdings. It controls Deilennar Investment, a commercial refrigeration leasing company; Mafuro Farming, a dairy farming business; and Aqua Aura, an agriculture centre-pivot distribution business.

SSCG is incorporated in Mauritius and Zimbabwe.

It has investments in fast-moving consumer goods, tourism, human resources recruitment, agriculture, mining, packaging, financial services, equipment leasing, restaurants and clothing industries in Zimbabwe.

Capri manufactures household refrigerators and is a distributor of electrical appliances.

CTC said the proposed transaction was classified as of a conglomerate in nature. Conglomerate mergers, by definition, do not pose serious competition concerns, however, in this instance competition concerns were in the indirect market of fund management because the merger had the effect of neutralising competition between two major competitors through indirectly uniting them.

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https://www.newsday.co.zw/business/article/200004695/ctc-sets-tough-conditions-for-capri-deal

Role of Competition Policy and Law in Mitigating Climate Change

Introduction

The international community commemorates the World Competition Day on the 5^th of December, the day when the United Nations Conference on Restrictive Business Practices approved the United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices in 1980. The aim of the World Competition Day commemorations is to ensure that stakeholders globally, realise the potential benefits from an effectively implemented competition regime, and also play their role in making competition regimes work worldwide. This year’s celebrations are running under the theme “Competition Policy for Mitigating Climate Change”. Climate change is threatening our existence on mother earth and developing countries are bearing the brunt of its impact. This article discusses how competition policy can be used to mitigate climate change.

Legal and Policy Framework

Over the years, Zimbabwe has made significant strides to incorporate climate change issues in its national development agenda as witnessed by the signing of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 at the Rio Earth Summit.  Zimbabwe is a signatory to the Kyoto Protocol entered into force on 16 February 2005 and operationalized the UNFCCC by committing industrialized countries and economies in transition, to limit and reduce greenhouse gases emissions in accordance with agreed individual targets. The Kyoto Protocol also established a rigorous monitoring, review and verification system, as well as a compliance system to ensure transparency and hold Parties to account with regards to emission targets. The expiration of the Kyoto Protocol in 2020 necessitated the need for a new binding agreement to guide future efforts to address climate change, which saw the adoption of the Paris Climate Agreement which is a legally binding international treaty on climate change. It was adopted by 196 Parties at Conference of the Parties (COP) 21 in Paris, on 12 December 2015 and entered into force on 4 November 2016, with the goal to limit global warming.

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CTC urges more competition in Aviation Sector

The Competition and Tariff Commission (CTC) has encouraged more competition in the aviation sector saying this will lead to low ticket prices and the provision of quality services.

Competitiveness in the aviation sector is a critical factor in promoting economic growth, especially in the tourism sector.

According to the Commission, a reduction in air ticket prices has been witnessed globally post-deregulation since 1978, leading to an increase in entry and competition i the sector.

“There are numerous benefits arising form competition in the provision of air transportation services for both travellers and economic development of any country,” it said.

“Worthy noting is that by the dictates of theory, airlines mainly compete on price and quality of service,” said CTC.

“First, competition in the sector leads to low ticket prices as airlines compete for customers.”

The Commission said competition in the sector encourages ease of doing business, especially in promoting domestic tourism. “In Zimbabwe’s case, a reduction in air ticket prices will promote domestic tourism. Since air transport is fast, lower prices make it affordable for travellers to move from one tourist destination to another,” said the Commission in its latest newsletter.

It also spurs international tourism to other local tourist destinations like Kariba and Hwange provided air tickets are cheap, thereby promoting tourism.”

At the regional level, given the geographic position of Zimbabwe, which is centrally located in Southern Africa, low air ticket prices can strategically position the country to become the regional aviation hub where travellers from the region connect flights to different parts of the world. -@SikhulekelaniM1

Manufacturing sector dominates 2021 mergers, acquisitions

ZIMBABWE’S manufacturing industry accounted for the bulk of mergers and acquisitions in 2021, the Competition and Tariff Commission (CTC) said last week.

In its 2021 annual report, CTC said 33% of the mergers and acquisitions were in the manufacturing sector.

It said the mining, quarrying, agriculture, forestry, fishing and financial and insurance service sectors were also among leading industries sought-after by investors.

The report said 22 mergers and acquisition transactions were approved without conditions in 2021, while two deals were approved with conditions.

In the period under review, notable approvals were Delta’s purchase of Mutare Bottling Company from telecoms giant Econet Wireless, and the big deal in which Sotic International Limited swooped into Bindura Nickel Corporation, taking over 74,73% shareholding.

The Zimbabwe Stock Exchange-listed leisure chain, African Sun Limited acquired Dawn Properties during the period.

Mergers and acquisitions approved during the period also included the acquisition of up to 100% of issued ordinary shares in Adapt IT Holdings Limited by Volaris Group Inc, as well as the acquisition of Ascendis Vet, Ascendis Animal Health, Kyron Laboratories and Kyron Prescriptions by Sun Valley Estates.

The commission also approved the Dairibord Zimbabwe/Tavistock Estates deal and the acquisition of 100% shareholding in DSI Underground by Sandvik Holdings.

CTC director Ellen Ruparanganda said in 2021, the commission pursued its mandate of promoting and maintaining competition in all sectors of the economy and providing trade tariff assistance.

She said four restrictive practice cases were investigated in the school uniforms market, banking sector, central securities depository market and distribution of day-old chicks.

“Identified anti-competitive practices in the respective markets were resolved through negotiations, instituting enforcement orders and encouraging business to enter into compliance agreements,” she said in her statement accompanying the report.

To proactively maintain competition in Zimbabwe, Ruparanganda said 18 transactions were notified through Common Market for Eastern and Southern Africa Competition Commission.

She said advisory opinions were issued to parties with regards to the notifiability of six transactions, based on facts submitted in line with the Competition (Advisory Opinion) Regulation, 2021.

This assisted stakeholders to interpret and apply the Act accordingly, she said.

CTC chairperson Benedict Moyo said mergers which significantly lessened competition were prohibited.

However, he said merger transactions remained sustained and decisions or determinations were provided timeously to merging parties.

“Concurrently, delays in reviewing merger notification fee thresholds that had been impacted by currency developments affected (CTC) operations through lower revenue generated,” Moyo said.

https://www.newsday.co.zw/business/article/200003905/manufacturing-sector-dominates-2021-mergers-acquisitions