CFTC presses for orders against Masm

Malawi’s consumer protection agency, the Competition and Fair Trading Commission (CFTC) has pressed for orders against the Medical Aid Society of Malawi (Masm), Pep Stores and Alpha Milling.

In a public hearing that took place on May 16 at Sunbird Mount Soche Hotel in Blantyre, the CFTC secretariat, presenting its arguments to the Competition Commission chaired by Gerald Chigona, argued that to protect consumers the companies had to cease and desist from a number of practices.

We need to cease and desist: Malonda
We need to cease and desist: Malonda

Under the Masm case, the CFTC secretariat headed by its executive director Charlotte Malonda argued that the medical scheme provider should let med-clinics operate on their own without support and interference from Masm a member-owned health insurance scheme.

The consumer protection agency argued that Masm’s continued support of the clinics through subsidies was distorting the market and feared that other clinics would collapse, thereby leaving Masm’s med-clinics the only players on the market.

Blantyre Adventist Hospital chief executive officer (CEO) Kirby Kasinja, a third party in the hearing, noted that patients are redirected to other hospitals from their hospitals once the clients contact Masm for approval.

Kasinja further pointed out that during inspection of their hospital by Masm, patients are advised to go to specific clinics.

But Masm CEO Sydney Chikoti, who was present during the inquisitive public hearing, argued that their med-clinics are now operating independently from the medical aid.

On subsdising the clinics, Chikoti pointed out that the support was only an investment aimed at ensuring that the clinics provide better services as the sector requires.

In another case, the CFTC also noted that Pep Stores, a South African retailer has been misleading consumers through its adverts that are placed in the shops.

The CFTC secretariat noted that the price tags that are put on racks do not represent the prices of the clothes paid by consumers.

However, Pep Stores noted that they are already implementing changes which include public announcements to ensure that they do not misinform customers.

Another company, Alpha Milling, producers of chicken feed and chicks, during the hearing was also accused of tying chicken feed to day-old chicks.

The CFTC secretariat noted that Alpha Milling through an affiliated company produces day-old chicks—a dominant product which it then sells to farmers that have been buying chicken feed from them effectively influencing customer decision.

The CFTC asked the commission to order Alpha Milling to cease and desist from the practice and issue out a public notice against the practice.

In its defence, John Conforzi, who represented Alpha Milling argued that the practice of tying chicks to chicken feed is not the company’s policy. He noted that the practice may have been done by some of their officers due to long-term relationships with loyal customers.

After listening to the parties, the commissionled by Chigona advised that they would come up with a decision on the cases soon.

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