Benefits of competition for low-income groups:

The Case of Albania

Ermal Nazifi Albanian Competition Authority (ACA)

“As usual, in every scheme that worsens the position of the poor, it is the poor who are invoked as beneficiaries.” -

Vandana Shiva

Human Rights activist

This is not the case ofcompetition Policy!

Of course !

Competition Policy is to make sure that:

ALL consumers have a vast choice

BEST productsBEST prices.

Instead ….

Low income consumers – Lower possibilities to choose.

Free competition can help increase their options.

Especially in vital products for everyday usage

Consumers with low income

“Anticompetitive practices …in the consumer goods sector clearly impose a

large cost on consumers, and in particular the poorest consumers, by artificially increasing the price of basic necessities (such as chicken, bread, milk, beer, cement, bus transportation) and therefore reducing the real income of poorer consumers”.

*Frederic Jenny, Cartels and Collusion in Developing Countries: Lessons from Empirical Evidence,

World Competition 29(1): 109±137, 2006.

Empirical evidence – Jenny*

The case of Albania - General

Poverty headcount ratio at national poverty line (% of population)

12.4 % 2008

18.5% 2005

25.4% 2002

Albania is lower middle income level country

“An anticompetitive practice is not merely an administrative violation, but a denial of an opportunity for consumers of getting products at lower prices, better quality, more choice, and, thus, higher wellbeing”.

Lindita Milo Chair of ACA

ACA – CASES

1. Vodafone / AMC – Unfair prices in Mobile Telephony Market

(largest fine to date and recommendations that led to the opening of the market)

ACA – CASES

2. Ready mixed ConcretePrice - fixing agreement

ACA – CASES

Exchange of information and concerted practice

3. Wheat import and flour production

ACA - CASES

Discriminatory pricing

4. “Armo” D2 Diesel wholesale

ACA - CASES

Price fixing agreement

5. Bread Production

ACA - CASES

6. Bid Rigging

saving public funds for purchasing more good and services.

Empirical studies (JENNY) have shown that international anti-competitive practices are often aimed at preventing the emergence of local industries in developing countries

Hurt developing countries which are crucially dependent on imports

Large sums of money generated from low income countries is passed at the undertakings taking part in international anti – competitive practices

The importance of international cooperation

Being successful in the national cases is not enough

International cooperation is a must Especially cooperation between less

developed countries/regional cooperation is needed.

Cooperation should focus not only on joint seminars, trainings and events but also on concrete enforcement measures against international anticompetitive practices.

The importance of international cooperation 2

Competition policy is a “pro poor” policy ACA has prioritized investigations on

“everyday”, consumer goods. Cooperation between state institutions is

needed. Dialogue with judges, business community,

legal community and ACADEMICS is a must. International cooperation should include

concrete enforcement measures on cross-border/international anticompetitive practices.

Conclusions

Thank you!Faleminderit!Blagodaria!

Contact: enazifi@caa.gov.alcompetition@caa.gov.alwww.caa.gov.al