SMMEs lobby for large retailers support
They say there is a large retail store that has ventured into small stock production and therefore, unfairly competing with small stock producers, saying that Government should compel such companies to support them.
Local Enterprise Authority (LEA) has indicated that it continues to lobby the Government through the Ministry of Investment, Trade and Industry to put in place policies and regulations that will compel large markets, especially the retail sector, to support and procure from local producers.
The organisation, which said this to delegates during a Small, Medium and Micro Enterprises (SMMEs) Pitso held a fortnight ago, is lobbying government in response to a request made by the SMMEs at last year’s Pitso, that large companies should be encouraged to support them (SMMEs) instead of competing with them for business.
The SMMEs had said that there was a large retail store that had ventured into small stock production and therefore, unfairly competing with small stock producers, calling on Government to compel such companies to support SMMEs.
While lobbying Government, LEA said it encourages its clientele to market themselves and produce products of high quality so that they can be able to compete with other business establishments.
On the point that Government should reserve certain services for SMMEs and prohibit large retail stores from undertaking such services, the response from LEA was that under the Trade Act, Government has reserved 17 activities such as takeaways, fresh produce (butcheries) and bakeries to SMEs. It noted however, that some reserved business activities are allowed to operate within large retail stores (supermarkets) provided they are operated by citizens.
Another concern arising from last year’s Pitso was that Kgalagadi Plastic Industries (KPI) is enjoying a monopoly and therefore charging exorbitant fees for their products, and therefore negatively affecting the cost and sustainability of youth projects.
LEA has since indicated that an “investigation undertaken by the Competition Authority shows that there are many players in the market that supply bags and polystyrene (fomo) pack manufacturing. KPI, which manufactures plastics products has many other competitors including Mushtaq Plastics (Pty) Ltd, a plastic bag manufacturer; Green Packaging (Pty) Ltd, a manufacturer of polystyrene packs; Star Pack, a distributer of both plastic bags and fomo packs.”
The organisation pointed out that the players in the industry had complained of increasing competition, alleging cheaper imports. “From the investigations, KPI prices are generally higher than those of the other competitors. This cannot be viewed as anti-competitive behavior, unless an enterprise controls 25% of the market share, which is not the case with KPI,” it highlighted.