Created on Thursday, 07 September 2017 14:04
FOR IMMEDIATE RELEASE: 6 SEPTEMBER 2017
SEVEN COMPANIES FINED FOR UNFAIR TRADING PRACTICES
The Board of Commissioners of the Competition and Fair Trading Commission (hereinafter referred to as ''The Commission") held its 49th Meeting in Lilongwe on 31st August 2017 to consider and adjudicate over cases relating to unfair trading practices, and anti-competitive business conducts. These cases were brought before the Commission in accordance with Section 8 of the Competition and Fair Trading Act.
In total, the Commission considered and adjudicated over twenty-six (26) cases of which twenty (20) were on unfair trading practices while the rest were on anti-competitive trade practices.
This statement provides a summary of the Commission's determinations on some of the cases.
For more information, contact Mr. Lewis Kulisewa on 0999960235 or email
SUMMARY OF THE COMMISSION’S DETERMINATIONS OF THE CASES
1. Four companies fined MK5million each for supplying harmful spirituous alcoholic products
The Commission has fined four companies—Chilwa Investments, S.R Distilleries, Bwenzi Group and Reddy’s Beverages Limited— to pay a fine of MK5 million each for supplying the market with uncertified liquor which is likely to cause harm to consumers.
The Commission also ordered the companies to cease and desist from supplying harmful and uncertified products and to conduct a thorough product recall in all retail outlets within seven days. If any liquor products will be found on the market, the Commission will impose another fine to the offending companies.
This followed investigations conducted by the Commission which showed that these companies were supplying uncertified spirituous liquor products. The Commission established that, despite being warned about the injurious nature of the products, spirits produced by these companies were readily available on the market in substantial quantities.
The Commission is appealing to all consumers to desist from taking uncertified liquor. The Commission shall impose heavy fines against anyone found producing and distributing uncertified liquor.
2. MASM fined MK5million for misleading advertising
The Commission has imposed a fine of MK5million to Medical Aid Society of Malawi (MASM) for engaged in deceptive advertising. The Commission has also ordered MASM to cease and desist from engaging in misleading advertising and to make full and timely disclosures to their consumers whenever there are changes to the terms and conditions governing medical insurance.
This followed investigations which the Commission conducted on allegations that MASM published radio and newspaper advertisements stating that they had scrapped off shortfalls on medical bills to its members. However, the Commission did not find any evidence to support claims that shortfalls had been scrapped off. Instead, the Commission found that, contrary to the claims in the adverts, a number of private hospitals were demanding payment of shortfalls by MASM members on every visit.
The Commission found this conduct deceptive and a deliberate ploy intended to create an impression that the medical cover was free of additional charges. Further, the Commission found that MASM did not make full disclosures on the introduction of wallets for the different services offered and its implications on members' welfare.
3. ETG Parrogate Cotton Limited fined K5million for supplying products which do not comply with labelling standards
The Commission imposed a fine of MK5 million to ETG Parrogate Cotton Limited for supplying products which did not comply with prescribed labelling standards and failing to comply with the interim Cease and Desist Orders issued by the Commission.
This followed investigations which the Commission conducted which established that ETG Parrogate Cotton Ltd branch in Zomba was selling edible cooking oil Purola in 200 litre drums and 20 litre containers which did not provide expiry dates for the product. Further, the Commission also observed that the containers and the selling premises were generally dirty and unhygienic.
4. Capital Oil Refining Industries Limited fined K2million for supplying products which do not comply with labelling standards
The Commission imposed a fine of MK2 million to Capital Oil Refining Industries Limited for supplying products which did not comply with prescribed labelling standards.
This followed investigations which the Commission conducted which showed that CORI Limited branches in Ntcheu, Liwonde and Zomba were selling edible cooking oil of Kukoma, Palm Oil and Bwiti-Bwiti brands 200 litre drums and 20 litre containers which did not provide expiry dates for the product. Further, the Commission also observed that the containers and the selling premises were very generally dirty and unhygienic.
5. Alleged abuse of dominance by Central Poultry dismissed
The Commission has dismissed allegations of abuse of dominance by CP Feeds Limited. Specifically, it was alleged that CP Feeds Ltd were selling chickens at a price which undercut small scale poultry producers in Mzimba.
This followed investigations which the Commission conducted which showed that CP Feeds Ltd was vertically integrated such that their production costs for chickens were much lower than that of small scale poultry producers.
This allowed the company to sell at much lower prices. There was no evidence to prove that CP Feeds Ltd was abusing its market power. The Commission held that the small scale producers were demanding protection from legitimate competition from companies enjoying economies of scale and scope.