Price fixing, cartels and other features of village politics

Mpumelelo Mkhabela

Mpumelelo Mkhabela

A FEW years ago fellow villagers and I were summoned to a community meeting by the headman of Ngwenyeni village, near Komatipoort. 

Typical of village gatherings, the agenda was always circulated via hearsay in churches, family gatherings, funerals, weddings and drinking spots.

Whenever a meeting was scheduled to discuss what many considered trivial matters, libandla (the gathering) would be constituted of a small number of villagers.

But whenever villagers knew the matters up for discussion were controversial and would very likely impact on their livelihoods, the gatherings were invariably huge. As was the case on the day I was present.

The agenda was loaded. Stock theft, a businessman who wanted a piece of land to start a business, a funeral undertaker who wanted to set up shop in the village and an application to increase the price of umqomboti (sorghum beer).

Each item invited heated exchanges among the villagers.
On stock theft, there were wild accusations against those suspected of stealing cattle and goats.
Some speculated there were people from Mozambique who crossed the Lebombo mountain just to steal cattle.

Though I didn’t speak, I was one of those who didn’t believe in this theory because for many years we were fed lies that my father’s cattle were stolen by Mozambicans. We believed it until a troubled neighbour, seeking salvation from the Almighty, confessed in church that he had stolen cattle from the Mkhabelas.

The gathering eventually closed the stock theft item on the agenda after some elders were assigned to investigate some of the allegations and report back at the next meeting.
Details were requested of the businessman who wanted to start a business in the village.

The funeral undertaker matter was dealt with quickly.

“They want to kill our children so that they can get money,” one woman said.

The sentiment was upheld. To this day, there are no funeral undertakers in my village.

Then came the big matter that had kept many waiting under the smouldering sun. It was about an application by the umqomboti brewers to raise the prices of their brew from R1 for a litre to R1.10. At that time, in my village the price of umqomboti was set by consensus.

In modern day economic parlance this is called “regulated price” or “administered price”.
The process to raise the price was quite cumbersome and lengthy.

The brewers – who were predominantly women – would have to agree among themselves before they sent a delegation to the headman to present their case.

Among other things they would consider during their deliberations and actual application would be energy and resources used to put together a quality brew.
The time it took to fetch water from the river, the prices of sorghum, transport, and other factors described by economists as “input costs” were always cited to justify price hikes.

Economists would describe this group of women as a “cartel” and the discussion among them as “price-fixing”.

The brewers had a roster that determined who served her brew and when.
There was limited competition because for each day of the week there were a few women serving their brew. Anyway, the village was small. Economists would say it was a “captive market”.

The competition was not on the price, which was the same; it was rather on the quality of the brew.
Upon receiving the application, which had to be done verbally, the headman would ask a few question and refer the matter to ebandla (at the community gathering).

But there was another crucial requirement: All the brewers were expected to bring 25 litres of their best respective brews on the day the application was to be heard.
The men at the gathering would take turns tasting the different brews before they could recommend to the headman whether the price increase should be granted or rejected.

So, that was the procedure.

It was not surprising therefore, that on the day in question most men sat throughout the whole meeting. There was great anticipation when the headman outlined the last item on the agenda and called upon one of the brewers to come forth and table the application.

As the woman explained that their profits have declined due to increased prices of sorghum and they were experiencing difficulties getting water, some of the connoisseurs jeered.

There was in the meeting a man known as Mbulawa, a connoisseur of all connoisseurs. He was furious.
How dare the brewers asked for such a “sharp increase” when the quality had dropped, he fumed.

The brewer explained further before she invited the gathering to taste the quality of the different brews that they vouched they would produce henceforth.

The queue was quite long. But everyone was anticipating Mbulawa’s opinion as if it held the key to the decision.

There were several buckets in front of him. He knelt down, lifted the first bucket and took a sip. He then shook his head in disapproval.

He went for the next bucket, took a sip and shook his head.

He jumped to the next, took a sip and shook his head.

And he went for another bucket, took a sip, and his head remained still. Another sip from the same bucket; head still.

Another sip; head still. Another sip; head still for seconds.

At this point people cheered and laughed. It’s your guess whether the price increase was granted.

In future I will explain why I’m telling this story.

  • Mpumelelo Mkhabela is the editor of the Sowetan
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