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“The Commerce Commission, Vonu beer and competition” Letter to Editor (The Fiji Times, Fiji Sun, Island Business, Republika)(sent 23 April 2014

24/04/2014

“The Commerce Commission, Vonu beer and competition”  Letter to Editor (The Fiji Times, Fiji Sun, Island Business, Republika)(sent 23 April 2014

Dear Sir,

Several years ago, I queried why the Commerce Commission had allowed Carlton Brewery (then virtually a beer monopoly in Fiji) to take over South Pacific Distillery, Fiji’s only rum producer, also benefiting from substantial duty protection at great cost to consumers.

Despite this takeover leading to a clear lessening of competition in Fiji’s alcohol consumption market, the Commerce Commission strangely made no objection.

Recently, a major soft drink multinational producer/retailer, also enjoying substantial market power (a favorite phrase of Dr Reddy, the Chairman of Commerce Commission), took over Carlton Brewery, thereby increasing its concentration of market power in the broader “drinks” market.

There was apparently no objection from the Commerce Commission although in the comparable media industry, owners of shares in television, radio stations  and magazines, have been forced by decree (and at some loss) to choose between the sub-media and not have cross-media ownership.

Now it seems that the manufacturer of Fiji Beer has also taken over the manufacturer of Vonu Beer, eliminating even that tiny bit of competition in the domestic beer producers’ market.

Can the Commerce Commission publicly explain why this has been allowed, so that curious students and economics lecturers (if any still exist in Fiji) can better understand the subtle functions of the Commerce Commission?

We are still waiting for a response from the Chairman of CC to my questions (through these columns) on his failure to regulate the exorbitant retail prices set by mobile companies, and the equally exorbitant prices on the domestic routes set by the monopoly Fiji Airways (with the monopoly profits no doubt assisting considerably in the miraculous payment of dividends to its shareholders).

I would plead with Mrs. Premila Kumar (of Consumer Council) to desist from answering on Dr Reddy’s behalf, as she rashly attempted when voluminously evading my question on why the Consumer Council was not tackling some companies who were targeting children in their advertisements for chicken sales.

 

Professor Wadan Narsey

 

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