as ENEE expanded its transmission network - Hondurus pattern


 Public companies or companies holding special or exclusive rights,
including designated monopolies (Article 280 EUCAAA).
The Honduran Constitution establishes that monopolies, monopsonies, oligopolies, hoarding
and similar practices in industrial and commercial activity are prohibited. Also, the Constitution
establishes that temporary privileges granted in the form of scientific, literary, artistic or
commercial property rights, patents of invention and trademarks will not be considered private
monopolies. Notwithstanding the above, the national company for electric energy or “Empresa
Nacional de Energía Eléctrica (ENEE)” was incorporated as an autonomous body responsible
for the generation, commercialization, transmission and distribution of electricity. ENEE's
Constitutive Law did not expressly prohibit the coexistence of the state-owned company with
private companies and allowed private companies to operate in the generation and
distribution sub-sectors, leaving ENEE with the exclusive rights on transmission and limiting
the generators and distributors to connect to ENEE's transmission network. It is important to
mention that eventually, 

as ENEE expanded its transmission network, it acquired private
distributors until it established a Public Monopoly. There has been a tendency of price
escalation, and energetic crisis are common, hence there is pressures for the market to be
opened. 48 With the entry into force of the General Law of the Electricity Industry and the
signing of the Public-Private Partnership Contract between ENEE and “Empresa Energía
Honduras”, the most significant step was taken to eradicate the monopoly that ENEE once had;
however, with the approval of the Special Law to Guarantee Electricity as a Public Good of
National Security, ENEE could once again establish a public monopoly in the sector.
It is also important to consider that although it is true that there are no markets reserved by the
State, each sector may have rules for the control of foreign investment in its special legislation.
e:%22Honduras%22 and
TA to Support the Implementation of the Trade Pillar of the EU-CA Association Agreement
Legal review of the Central American Competition framework
The Law for the Defense and Promotion of Competition does not expressly exclude any
market. However, it reserves to the State, for reasons of public order and social interest, the
exercise of certain basic industries, operations and services of public interest and to dictate
measures and laws. It is important to consider that in both the energy market and the oil
derivatives market the price is regulated by their respective regulatory commissions, therefore
the price is fixed. Additionally, in the sugar industry, the CDPC has recommended economic
agents to refrain from participating in meetings with State institutions whose objective is to
reach agreements, conventions or written or verbal measures related to the establishment of
prices for the market.
According to the sectoral study of the Competition Commission, in the agricultural sector, rice
production sub-sector, entry barriers arise for the following reasons: 1. Lack of production
capacity to supply domestic consumption, which forces the establishment of preferential
imports at a zero tariff through protectionist mechanisms in the external market. 2. The
establishment of purchase and sale agreements, since these make it possible to fix prices,
production purchase quotas and the distribution of such quotas. 3. Horizontal integration,
potential competitors may face an industry that operates under a coordinated strategy that
does not allow competition on equal conditions.

 Distribution of pharmaceutical products
According to the Competition Authority, there are approximately 39 laboratories, which
concentrate the national distribution of medicines and 141 drugstores in charge of importing
and wholesale distribution of medicines, retail marketing cover approximately 1,123
independent pharmacies and 9 pharmaceutical chains dedicated to the purchase and sale of
medical products in small amounts. In recent years, a change in the level of competition has
been observed, as a result of the incorporation into the market of large pharmaceutical chains
that operate under the format of Drugstore and Pharma, in addition to the incursion of
drugstores and laboratories in the retail sale of pharmaceutical products, through the
acquisition or establishment of pharmacies. In February 2007, the representatives of
pharmaceutical chains held a meeting where they reached agreements to standardize
discounts in all pharmacies and pharmaceutical chains at 15% for all medications and 25% for
the elderly. The foregoing forced the Competition Authority to carry out an investigation in
view of the fact that said consensus contravenes the provisions of art. 5.1) and art. 7.2) of the
Law for the Defense and Promotion of Competition, which include the prohibition of reaching
agreements that seek to fix or establish prices. Exclusive distributions and restrictions of
passive sales must be seen with caution, as the law establishes that any conduct that “restricts,
diminishes, damages or impedes or vulnerates the process of free competition in the
production, distribution, supply or commercialization of goods and supplies”, could be found
against the law.

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