Property concentration "affects democracy"

24 April 2016

In an interview published in La República, Germán Alarco, professor at the Universidad del Pacífico in Lima and former vice-minister of economy, criticised the degree of concentration of property ownership in Peru, and argued that this is detrimental to democracy.

His comments arose as a consequence of the acquisition of a chain of pharmacies, Boticas Arcángel, by Grupo Quicorp, one of the biggest chains of pharmacies in Peru and owner of Mifarma, BTL and Fasa as well as Quimica Suiza.

Alarco is critical of the lack of any policy to reduce business concentration in Peru. He mentions four bills that have been presented to Congress, but were voted down because of the influence of the large economic groups in the legislature. He points to the failure of Indecopi, the Peruvian competition watchdog, to regulate competition policy ex ante. In particular, he points to excessive concentration of ownership in landholding and in the media.

Since the 1990s, Peru has seen a huge change in ownership of the most fertile land in the irrigated valleys of the coast in favour of agribusiness. In the media, the El Comercio group has attracted strong criticism since it now controls 80% of the market for newspapers, as well as owning two TV channels (Channel 4 and Canal N). Concentration of ownership is notable in the pharmaceutical sector, where the biggest company is Inkafarma.

Alarco criticises the campaigns of political parties for ignoring the subject of market concentration and how this affects consumers. “Only the Frente Amplio and the Alianza para el Progreso proposed [the need for] regulation of economic concentration” he says, “Keiko Fujimori made no mention of the issue and PPK has only just made mention of this, but in reference to the media only”.

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    The Peru Support Group exists to promote social inclusion, sustainable development and the observance of human rights in Peru. To that end the PSG highlights shortcomings in observance of established norms, whether international or local in nature, in its research, advocacy and publications. In so doing, it underscores the relationships that exist within the political system, how institutions work, and the effectiveness of policies that aim to reduce poverty and inequality within the context of sustainable development.

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