Illovo complies with CFTC order
Illovo Sugar (Malawi) Limited has complied with the Competition and Fair Trading Commission (CFTC) order in line with competition laws by being transparent in its trade practices.
This follows accusations from the CFTC that the sugar manufacturer alongside Simama General Dealers were in gross violation of the Competition and Fair Trading Act, which has been triggering sugar price rise and infringing consumers’ rights.
CFTC acting executive director Charlotte Malonda ordered Illovo to comply with the laws by being transparent in its trade practices after establishing that small sugar wholesalers in Karonga are blocked by Simama General Dealers to buy the commodity directly from company.
This, the commission claimed, is done through various tricks including non-disclosure of information to other wholesalers about procedures for paying for sugar orders and in some cases providing false information about sugar non-availability at the distribution centre.
“The commission established that as a result of this, small-scale sugar wholesalers are forced to buy sugar from Simama General Dealers or Pezani General Dealers [which is an affiliate of Simama General Dealers] at a price higher than the ex-factory price.
“Consequently, the wholesalers sell to retailers at a price higher that the price they would have charged if they had bought the sugar directly from Illovo. Consumers, therefore, end up buying sugar at a price higher than the normal market price,” reads a statement from the CFTC.
However, the Karonga Business Community (KBC) rebuked CFTC, saying it fed false information to the media regarding the Karonga sugar saga.
“These grave malicious and defamatory false allegations emanate as per say from our business members, which we, the KBC distance ourselves as untrue,” read a statement from KBC.
But the Malawi Stock Exchange (MSE)—listed sugar manufacturer said traders are now free to purchase sugar for wholesale/retail purposes in any market area of their choice without any restrictions or need for a licence.
“This is different from the past when appointed sugar distributors were awarded quotas to sell sugar in a specific location within a specified time period. Having evolved over the many years, local sugar distribution is now liberalised and the system is open to any persons that are interested to participate in the selling of the product,” reads the company’s statement.
The company said as a formality exercise, any new customer will be required to register with the company at their sales office in Limbe by completing an application form and will be allowed to purchase sugar based on a minimum order of one metric tonne.
