Legality still a mystery at brewer of myths SAB

It was Lisa Glass not Charles. Lisa was the main brewer behind the setting up of Castle Lager in 1890. According to an excellent book with the grim title of Beer, Sociability and Masculinity in South Africa, Charles was a bit of a loser.

The book’s author, Anne Kelk Mager, a professor of history at UCT, says Charles’ brewing career was “short” and marred by “domestic violence and constant bickering with his brewer wife (Lisa)”. As Mager notes, the Charles Glass story, as created by South African Breweries (SAB), “is a discourse for men about men… Women are out of place in this world of male sociability.”

While I’m at it I may as well tell you that Farmer Brown was an invention by a top executive of Premier Foods in the 1980s in the hope – realised – of selling more eggs.

Generally I think it is a bad thing to interfere with myths that do no harm and might even make life sweeter. For this reason I have never told anyone under the age of 40 that Father Christmas doesn’t exist.

But I felt driven to break with tradition, as it were, on the matter of Lisa and Charles by the chilling prospect that SAB is preparing to create another myth. The new post-competition authorities myth revolves around the story of SAB protecting the “small guy” from the unrestrained activities of the Competition Commission as well as from the greedy opportunism of wholesalers who seek to charge the “small guy” ever higher prices for his beer.

The first airing of this myth was an opinion piece in Business Day yesterday by an executive director of SAB. The piece not only attempts to present SAB as the unwitting victim of the competition authorities but attempts to present Nico Pitsiladi of Big Daddy’s Group, who brought the 2004 anti-competitive complaint against SAB, as an opportunistic exploiter of the old government ban on black people trading in liquor. What is not mentioned is that Pitsiladi would only have been able to play this role with the support of SAB, which was the monopoly supplier of beer.

The new myth would have us believe SAB is a hapless victim desperate only to ensure “its products are available at affordable prices in every corner of the country”. To its enormous credit SAB is absolutely correct when it asserts, “real prices of beer in South Africa today are half of what they were 40 years ago”. Outstanding management, size and economies of scale that come with monopoly status ensure this.

With control over 88 percent of the local beer market it is almost inevitable that SAB will face allegations of being anti-competitive. But just because it is a large, almost-monopoly supplier with a reputation for being a bully does not mean it is contravening the Competition Act. And it does not mean its rights should be ignored. Whether it has acted anti-competitively can only be decided by the competition authorities after a vigorous, legally structured and public debate of the issues.

Unfortunately last week’s abandonment of the commission’s case against SAB means we may never know whether discounts offered to selected distributors were anti-competitive. Commissioner Shan Ramburuth has said he would like to make a direct referral to the Constitutional Court to establish the nature of the commission’s referral and investigatory powers.

It is not just SAB’s competitive status that remains uncertain in the absence of a court ruling, much of the effective functioning of the authorities will be undermined until that court creates certainty.

Such certainty would help ensure that the Competition Tribunal remains the best place for myths and allegations to be vigorously interrogated.