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Malawi Competition Commission watching sugar industry

The Competition and Fair Trading Commission (CFTC) has said although it is not an offence to enjoy monopoly powers, they are monitoring the sugar industry to check possible abuses of market power.

Against complaints of high sugar prices, CFTC, a local consumer protection agency, has noted that the sugar market in Malawi is characteristically a monopoly market with Malawi Stock Exchange (MSE)-listed Illovo Sugar (Malawi) Limited as the sole producer and supplier of the commodity.

Illovo has no competitor on local market
Illovo has no competitor on local market

CFTC executive director Charlotte Malonda, in an e-mailed response to questions on Saturday, said Illovo enjoys monopoly powers which have been worsened by the absence of import competition.

“The sugar market is one such market which is being closely monitored by the commission through its surveillance system. So far, the commission has not identified anything suspicious about the prices which would warrant a thorough assessment of the pricing system.

“In the absence of a detailed analysis of the sugar pricing system, the commission cannot comment whether the sugar price in Malawi is fair or not,” she said.

Malonda, however, said they are aware that Malawi is one of the most cost-efficient producers of sugar in the world.

“The commission, therefore, expects the price that consumers pay for sugar in Malawi to reflect the cost efficiency that the country enjoys.”

Malonda emphasised that under the Competition and Fair Trading Act, it is an offence for a company with monopoly powers to abuse its dominant position.

Last week, Illovo Sugar (Malawi) public relations officer Irene Phalula said there are justifiable factors that drive sugar prices.

She said key drivers to price adjustments are normally currency movements, inflation, increase in cost of fuel and other major commodity input costs such as electricity.

Raising a need for protection, Phalula said throughout the world, sugar is one of the most highlyprotected agricultural commodities.

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2 Comments

  1. Competition commission i say once again go for cement manufacturers. Let truth be told on pricing of cement

    1. The other factory financial controller actually told me, that they can sell their cement at 75% of the current price and still make a profit, but they follow the marketing price of the industry leader as benchmark

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