Illovo under CFTC watch
The Competition and Fair Trading Commission (CFTC) says it is yet to make determinations on some cases it has been probing the giant sugar manufacturer Illovo Sugar Malawi plc for.
The commission’s statement on the matter follows allegations by consumer rights watchdog Consumers Association of Malawi (Cama) over the commission’s failure to protect consumers, who are coughing more to access sugar.
In a written response on Wednesday, CFTC spokesperson Innocent Helema said the commission has worked tirelessly to safeguard consumer welfare within the dictates of the law.
He said: “We cannot say much about the live cases for legal correctness, but let me put the record straight that the commission has not, in any way, failed in its duty to protect consumers.
“On the specific issues regarding sugar, you may want to know that CFTC has handled a number of cases in relation to the sugar industry in the past.”
Helema said among the concluded cases is the alleged Anti-competitive business practice by Illovo Sugar (Malawi) Limited and its appointed Karonga Warehouse administrator.
The other concluded case involved the pricing of mollases in foreign currency and selling sugar at higher prices locally and lower prices on the export market.
On Tuesday, Cama executive director John Kapito said Illovo Sugar Malawi plc market abuses and malpractices have gone unchallenged by government for a long time since the policy of government was to grow this local industry and create employment and insulating Illovo Malawi from any elements of competition through the ban of any sugar imports.
He said: “However, Illovo has refused to reciprocate offers from government by offering unaffordable sugar prices and at certain times creating unnecessary scarcity while making supernormal profits at the expense of poor consumers.
“Price comparisons of sugar in the region continue to show that Illovo Sugar Malawi is the highest in the region and one wonders why the Malawi prices are almost double compared to those in neighbouring countries given incentives government has given to Illovo Sugar Malawi.
“We are also requesting CFTC to urgently conduct public hearings on the conduct of Illovo Sugar Malawi.”
Kapito said the company is exploiting consumers by producing sugar at K1 500 per kilogramme, which consumers cannot afford, while in neighbouring countries, sugar is sold at about K900 per kg.
Meanwhile, the Malawi Government faces a daunting task to balance between protecting local manufacturers’ monopoly of the sugar market and interests of consumers who feel local sugar prices are exorbitant and require import competition.
Following issuance of two sugar import licences to Mugisha Investments to bring in 20 000 metric tonnes (MT) of brown sugar, Illovo Sugar (Malawi) plc has protested, saying this will affect earnings of sugarcane growers.
Ministry of Trade and Industry spokesperson Mayeso Msokera told our sister newspaper The Nation on Tuesday that they engaged Illovo management, users of industrial sugar and consumers on the matter on Monday.
While confirming attending the Monday meeting, Illovo Sugar (Malawi) plc company secretary Maureen Kachingwe on Tuesday said she would not be making further statements on outcomes of the meeting and further steps to be taken.
