Recent Decisions by the Competition and Fair Trading Commission

In a move to uphold fair competition and safeguard consumer rights, the Competition and Fair Trading Commission (CFTC) convened its 67th meeting on August 21, 2023, to deliberate on cases of anti-competitive business practices and unfair trading conduct. This statement summarizes the outcomes of the meeting and the CFTC’s determinations on major cases of unfair trading practices.

A total of 44 cases were brought before the Commission for adjudication—38 cases related to unfair trading practices, and 6 cases concerned anti-competitive business practices.

Alleged Supply of Harmful Products and Unconscionable Conduct by Zamm Investments
The investigation against Zamm Investments was initiated on January 30, 2023, following concerns about the supply of products potentially harmful to consumers and unconscionable business conduct. Instances of sealed “Cool Drop Natural Mineral Water” with floating debris raised concerns about the safety of the product. Subsequent complaints alleged similar issues with the product.

The investigation included site visits and laboratory testing of water samples by relevant authorities. The test results played a pivotal role in the Commission’s determinations:

• Zamm Investments is to be prosecuted for violating Sections 43(1)(e) and 43(1)(g) of the Competition and Fair Trading Act (CFTA). The investigation report will be forwarded to the Office of the Director of Public Prosecutions for further action.
• The Malawi Bureau of Standards will be engaged to undertake regulatory measures and initiate a recall of products from affected batches.
• Advisory notes will be issued to relevant authorities to ensure due diligence in water abstraction and waste disposal for production facilities.
• A note will be sent to the Ministry of Trade and Industry to enhance interventions preventing the distribution of harmful products in the market.

Alleged Unconscionable Conduct and Misleading Conduct by Illovo Sugar Malawi PLC
Illovo Sugar Malawi (ISM) PLC faced an investigation into alleged misleading and unconscionable conduct. Complaints were received regarding a sugar price increase that, according to the company, aimed to curb sugar smuggling due to currency devaluation. The Commission’s investigations revealed that the reasons for the price hike were unjustified and not linked to production costs.

The Commission’s determinations:

• ISM will face prosecution for violating Section 43(1)(g) of the CFTA. The investigation report will be submitted to the Office of the Director of Public Prosecutions.
• An advisory note will be sent to the Ministry of Trade and Industry to ensure that essential commodities like sugar aren’t shielded from import competition.
• ISM will be advised to reduce sugar prices, considering the company’s lack of mandate to control smuggling using pricing mechanisms.

Other Consumer Complaints
The Commission also addressed other cases, either through mediation or preliminary resolution. In instances where mediation fails, the CFTC pledged to guide complainants towards effective resolution.

These decisions underscore the CFTC’s commitment to maintaining a competitive and ethical business environment while protecting consumers from unfair practices.