The Competition Commission's Grocery Retail Market Inquiry found that there are features in the South African grocery retail sector that may prevent, distort or restrict competition, panel member Lulama Mtanga said on Wednesday.

The Grocery Retail Sector Market Inquiry was established on October 30, 2015, to assess several elements in the sector.

The inquiry conducted its analysis on the broad South African grocery retail sector. Mtanga acknowledged the widespread participation in the inquiry by various stakeholders.

The inquiry determined that there were three principal areas of concern that require remedial actions. Firstly, there is the use of long-term exclusive lease agreements and the exercises of buyer power by the national supermarket chains.

Secondly, there is an inability by small and independent retailers, particularly spaza shops, to adapt to a changing competitive environment.

Thirdly, there is a lack of a pro-competitive regulatory regime that is aligned with the convenience model associated with small and independent retailers.

The inquiry found that these factors were prohibitive to the realisation of the objectives of the Competition Act, which seeks, among others, to realise inclusive economic participation.

This was said to undermine the objectives of the Competition Act and the broader national economic policy aimed at facilitating transformation and economic inclusion.

The inquiry has proposed a suite of remedial interventions.

These range from changes in firms' behaviour to ameliorate the distortion in competition in relation to long-term exclusive lease agreements and buyer power to supporting mechanisms to bolster the sustainable competitiveness of small and independent retailers.

It also suggested that there was a need to modernise the regulatory landscape to create a conducive environment for the optimal functioning of competition.

Moreover, to ensure a streamlined and focused implementation process of the proposed remedial actions, the inquiry determined that a single implementing government department should be tasked with the role of overseeing and coordinating the implementation of the required interventions.

The department would also be required to work with an inter-governmental committee that will coordinate and direct the work to be undertaken by the department in terms of the regulatory and other recommended actions.