Ester Mbathera
The Namibian Competition Commission (NaCC) is taking legal action against Namib Mills and Namib Poultry Industries (NPI) over alleged anti-competitive behaviour.
The commission accuses the two companies of refusing to sell specific poultry products, known as tertiary range products, to micro, small and medium enterprises (MSMEs).
These products include soup packs, giblets, necks, hearts, gizzards, heads and feet, liver tubs, and breastbones.
“It is alleged that these products are in high demand in the informal sector, where the majority of MSMEs conduct their business. In doing so, the refusal to sell to new and existing MSMEs could be said to stifle competition in the relevant market, as it creates barriers to entry by refusing to supply,” said the NaCC.
The decision was gazetted in February.
According to the NaCC, this conduct hampers market entry for smaller competitors, restricts consumer choice, and negatively affects market competition.
“Consequently, the respondents’ practice of withholding this specific range of products from MSME customers for a period of six months is not only detrimental to undertakings involved in the selling of poultry products but also to the end consumers,” said the NaCC.
Under competition law, restrictive practices under Section 23 are classified as ‘per se’ prohibitions—these are inherently anti-competitive actions with no scope for justification through efficiencies or pro-competitive arguments.
Contrarily, Section 26 allegations of abuse of dominance are typically assessed using a ‘rule of reason’ approach.
This allows respondents, in this case Namib Mills and NPI, the opportunity to justify their conduct by demonstrating legitimate business rationales, such as economic efficiency, operational necessities, or practical market considerations.
The commission began its investigation in June 2022 following complaints from MSMEs.
On 21 December 2023, it issued a notice of its proposed decision.
It now plans to approach the High Court to declare the companies’ actions unlawful and to seek financial penalties.
“Ordering the respondents to cease with the conduct, restraining the respondents from engaging in the conduct in future and seeking an appropriate pecuniary penalty against the respondents,” reads the gazette.
The commission says that MSMEs, especially those in informal settlements, depend on these lower-cost poultry products.
“The refusal to sell to new and existing MSMEs could be said to stifle competition in the relevant market, as it creates barriers to entry by refusing to supply,” the commission said.
It found that the alleged refusal affected smaller businesses such as Pro Healthy Bites, which serve low-income communities.
Without access to these products, MSMEs lose customers to larger retailers located far from the communities they serve.
“Consumers may be compelled to purchase from larger retailers, incurring additional expenses on transportation and potentially paying higher prices for the products,” the commission said.
The NaCC also concluded that Namib Mills and NPI are dominant in the poultry market.
NPI is a subsidiary company of Namib Mills Group Trust and was established in 2011.
It is the only local producer of poultry products in Namibia, producing about 3,500 tonnes of poultry each month.
Namib Mills is the sole distributor of NPI products.
Together, the companies hold 74% of the market, with the remaining 26% made up of importers.
While Namib Mills and NPI denied having any policy that excludes MSMEs, they told the NaCC that customers must meet a minimum order of 280kg to buy certain products.
The commission has invited the companies to settle the matter to avoid court proceedings.
