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The opening issue of the second series, published in August 2023, examined exclusive commercial agencies in Lebanon, a practice the authors traced back to Ottoman-era supply concessions and its continuation under the French mandate. The issue argued that, despite its free-market reputation, Lebanon operated as an implicitly controlled economy in which exclusive agents, the banking sector and political power formed a mutually reinforcing arrangement that had lasted for almost a century.
The analysis focused on the role of banks: by denying trade finance to non-agent importers and withholding retail loans for goods brought in by others, banks protected incumbent agents while expanding consumer credit that fed their sales. The authors linked this to over-indebted households, the crowding out of SME funding, weak local industry, dependence on imports, delayed technology adoption and emigration of skilled youth. They set the pros of exclusivity, such as supply stability and quality control, against its costs for competition, consumers and the current account.
For policymakers and investors, the issue framed the March 2022 competition law as a necessary but incomplete step, and set out a reform programme built on enforcement capacity, consumer protection and an orderly transition away from exclusive arrangements.
Key findings
- At the time of writing, over 3,316 exclusive agencies operated in Lebanon, of which only 316 were officially registered with the Ministry of Economy.
- Exclusive agencies were described as dominant in healthcare, fuel and gas (around 70% of the market), vehicles, food and household consumables.
- An anti-monopoly law scheduled to take effect in 2008 was returned to Parliament after a media and political campaign against it.
- The issue recommended an independent National Competition Authority with powers to investigate, fine and issue injunctions against exclusive agency and cartel practices.
- It also proposed legislative amendments explicitly prohibiting exclusive agency, transitional support for affected businesses, and improved SME access to finance.
Archive: written in Aug 2023; figures and assessments reflect conditions at the time of writing.Summary of the paper; the full analysis is in the PDF.