MASSMART NOT A PREDATOR, BUT A KEEN COMPETITOR
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Today’s Business Report in its letter section carries a response from Mark Lamberti to last weeks article “Massmart plan for funds to take out rivals is ‘sinister’ – tribunal” that they do not have any evidence that Massmart’s business practices tended to the anti-competitive with regards to the acquisition of Finro. (Business Report, December 3). He indicates that the Competition Tribunal is inconsistent in its pronouncements and Mark goes on to argue that the comments in the article where from a board meeting five years ago and mentions that what is relevant is that companies abide by the letter and spirit of the law and seek every opportunity to beat competitors either by differentiating their goods and services or by offering the lowest price through being more efficient.
Your article “Massmart plan for funds to take out rivals is ‘sinister’ – tribunal” (Business Report, December 3) refers. The South African public must be surprised by the inconsistency of the Competition Tribunal’s pronouncements. First they suggest that directors should face criminal prosecution for collusion and now they describe as “sinister” the antithesis; namely my comment in a board meeting five years ago that “we cannot allow our competitors to flourish. Our margins may have to drop to fend off competitors.” The Oxford dictionary describes competition as “the struggle for existence or superiority in industry or commerce”. Massmart’s struggle for existence or superiority has been founded on delivering the lowest prices to clients and consumers over decades. To do this requires intolerance of being beaten by a competitor. Whether one competes through better service, more advertising, or in my words “a fighting fund” that lowers prices, is irrelevant. What is relevant is that companies abide by the letter and spirit of the law and seek every opportunity to beat competitors either by differentiating their goods and services or by offering the lowest price through being more efficient. After a thorough enquiry, the tribunal in its decision expressly stated that “there is no evidence to suggest that Massmart is likely to engage in a predatory strategy”. Ultimately, if there were a shred of evidence that Massmart’s business practices tended to the anti-competitive, the merger would not have been allowed to proceed. In every aspect, the tribunal’s decision vindicates Massmart’s competitive intent in Port Elizabeth and elsewhere. Without recourse to the facts, the innuendo and language used makes headlines but serves no other purpose. In a country where the life of the ordinary citizen is increasingly burdened by profligate parastatals and inefficient companies in non-competitive industries, the anti-private sector sound bite is no longer enough. Massmart through all its divisions continues to focus on delivering to the consumer, with Masscash in particular catering for those that are most vulnerable. This is the pro-competitive ethos that drives Massmart, and all of its acquisitions are and will continue to be directed accordingly.
Mark J Lamberti