Benefits of competition for low-income groups: The Case of Albania

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 of competition Policy! Of course !

Instead …. Competition Policy is to make sure that: • ALL consumers have a vast choice • BEST products • BEST prices.

Consumers with low income • Low income consumers – Lower possibilities to choose. • Free competition can help increase their options. • Especially in vital products for everyday usage

Empirical evidence – Jenny* “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.

The case of Albania - General 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 Price - fixing agreement 2. Ready mixed Concrete

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 saving public funds for purchasing more good and services. 6. Bid Rigging

The importance of international cooperation • 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 2 • 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.

Conclusions • 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.

Thank you! Faleminderit! Blagodaria! Contact: enazifi@caa.gov.al competition@caa.gov.al www.caa.gov.al

Benefits of competition for low-income groups: The Case of Albania