Imagine walking from shop to shop, hoping to find a better deal on everyday essentials like cement, fertiliser or bus fares, only to discover that every single enterprise is charging the exact same price, down to the last tambala.
It feels completely rigged, doesn’t it?
Across Malawi, many trade associations believe that publishing recommended price lists is a public service that keeps the market stable. But while locking in prices might offer some collective comfort to the businesses involved, both basic economics and the law tell a completely different story.
Under the Competition and Fair Trading Act (CFTA), collective pricing is a violation no matter how well the intentions behind it were.
When Malawi embraced democracy in the 1990s, we also committed to a free, liberalised market. This shift was built on a simple, timeless truth: when businesses compete, regular people win.
True competition forces a shop to lower its prices, bring in better products and offer warmer customer service just to earn your hard-earned money.
To protect this freedom, the law explicitly stops trade associations from setting prices for their members. Every single entrepreneur, shopkeeper and supplier must decide on their prices independently, based on their own unique costs, overheads and realistic profit margins. Anything less is price-fixing, a cartel behaviour.
When an association announcess “guideline prices” it is doing a lot more than offering a friendly suggestion. It quietly kills any incentive for a business to try harder or do better.
What might be marketed to members as a helpful lifeline during tough economic times is actually collusion framed gently as a “minimum price” or a “suggested margin.”
It locks prices in place, ultimately stripping ordinary buyers of their right to shop around, hunt for a bargain and find cheaper alternatives when times are tight.
The damage goes way beyond the consumer’s pocket, too.
Think about a young, ambitious woman opening her very first business. Because she operates out of a smaller space and keeps her overhead low, her efficiency means she can afford to charge less than the established giants, passing those savings directly to her community.
But when a trade association enforces a uniform pricelist, that young entrepreneur is boxed out. She faces massive pressure from older, powerful competitors to “stick to the rules”, preventing her from growing her business through the lower prices she naturally earned.
Instead of a vibrant economy driven by fresh energy, we get a stagnant marketplace where inefficient businesses are protected and innovative ones are suffocated.
Because this behaviour does so much harm, the CFTA does not look at excuses. The mere act of agreeing on prices, discounts or profit margins is illegal.
To clean up the market, the Competition and Fair Trading Commission (CFTC) now has the teeth to back up these rules with heavy penalties.
Businesses caught fixing prices face massive fines of up to 10 percent of their gross annual turnover. Business owners and managers involved in these deals can be personally fined up to five percent of their annual income.
So, if trade associations cannot set prices, what is the point of having them?
Associations are incredibly vital when they focus on helping their industries grow safely and legally.
They should be lobbying the government for better regulations and tax incentives, setting high standards for product safety and researching new trends to help their members succeed.
Their real power lies in lifting their members up through advocacy, not in controlling their cash registers.
Ultimately, a healthy economy is one where prices reflect the real, honest costs of running a business, not the cozy comfort of an association committee.
When we protect open competition, we protect the everyday consumer, reward the hard workers, and build a Malawi where everyone has a fair shot at a better life.
