If Ansa McAl were to succeed in any take-over of Banks DIH it would create a monopoly in the local beer market.
This may have some dedicated drinkers worried about rising prices, but under legislation soon to be introduced, Ansa McAl would be prohibited from abusing its dominant position.
The Competition and Fair Trading Bill is scheduled to go to Parliament early next year. However, its approach to competition is not intended to prohibit monopolies or break them up. In that regard there is nothing in the legislation to stop a take-over going through. The Act instead attempts to ensure companies do not abuse their positions. This reflects the reality that Guyana like many other small Caribbean countries can be subject to monopolies and it is unrealistic to expect to prohibit them. The objects of the Act according to the draft document are to: promote, maintain and encourage competition and enhance economic efficiency in production, trade and commerce; prohibit anti-competitive business conduct which prevents, restricts or distorts competition or constitutes the abuse of a dominant position in the market. "An enterprise holds a dominant position in a market if, by itself or together with an interconnected enterprise, it occupies such a position of economic strength as will enable it to operate in the market without effective constraints from its competitors or potential competitors".
The draft document states that the market shall be determined by reference to all factors that affect competition in that market, including actual or potential competition from goods or services supplied or likely to be supplied by persons not resident or carrying on business in Guyana. So that means that even if a soap producer is the only one in the country it may not hold any advantage in the market due to imports.
But if a company has one subsidiary importing product and another producing a similar item "any two enterprises are to be treated as interconnected enterprises if one of them is the subsidiary of the other or both are subsidiaries of the same parent enterprise."
And all agreements are prohibited between enterprises which have or are likely to have the effect of preventing, restricting or distorting competition in a market.
Some of the abuses the legislation looks at are "tied selling", a practice whereby a supplier as a condition of supplying the goods or services requires the person to acquire any other goods or services. In other words a dealer who buys a case of Banks should not be compelled to buy a case of Heineken if he wants a better price. Nor can a supplier tell the dealer not to carry competitive items.
A Competition Commission is to be formed to enforce the law with powers to conduct investigations. The commission will also co-operate with the Competition Commission for Caricom and "competition authorities of other member states for the purpose of detecting and preventing anti-competitive conduct and exchanging information relating to such conduct....The competent Minister may request the Community Competition Commission to cause an investigation to be carried out where he has reason to believe that business conduct by an enterprise located in another Member State prejudices trade and prevents, restricts or distorts competition in Guyana."