Illovo gets court relief in sugar price case

The High Court of Malawi has granted Illovo Sugar (Malawi) plc an order sparing the company from prosecution for alleged unfair competition after a Competition and Fair Trading Commission (CFTC) investigation found it guilty.

Making the order in Lilongwe on September 12 2023, Judge Charlotte Malonda said upon reading the application filed and the sworn statement of Maureen Kachingwe in support of the application for stay and upon reading the skeleton arguments filed herewith, she was satisfied that it is a proper case where an order for stay pending appeal should be granted.

She said: “It is hereby ordered that the determination of the commission/respondent dated the 23rd August 2023 be and is hereby stayed pending the hearing/determination of the appeal by the  the appellant.”

Briefing the media in Lilongwe in August          on the commission’s decision, CFTC executive director Vincent Lloyd Nkhoma said Illovo Sugar was under probe for alleged unconscionable and misleading conduct following a consumer complaint on the adjustment of its sugar prices.

A statement issued by the commission indicated that the complainant argued that the adjustment was unjustified because the new prices did not reflect the economic factors on the ground.

Reading the determination, Nkhoma said the CFTC board sided with the complainants after reasoning that Illovo Sugar, a private business entity, had no mandate to contain smuggling and should have notified the relevant authorities for remedial measures.

The board further observed that Illovo Sugar allegedly took advantage of the consumers’ fears of an impending sugar shortage on the local market to raise the price of sugar without credible justification.

The CFTC then recommended that Illovo should be prosecuted for violating Section 43 (1) (g) of the Competition and Fair Trading Act and for the commission to write advisory notes to the Ministry of Trade and Industry, the policyholder, to protect consumers’ interests.

The investigation started in January this year after a complainant petitioned the CFTC to review the decision by Illovo to raise the price of sugar.

In a press statement announcing the new prices in October 2022, Illovo Sugar said it raised the price of its sugar to make the product expensive on the local market and curb its smuggling to neighbouring countries.

Ministry of Trade and Industry in July held off on making a determination on the high-profile inquiry that involved testimony from industrial users of sugar, sugar manufacturing companies and the Malawi Revenue Authority after Illovo requested that the ministry should wait for the conclusion of the CFTC case.