Business community have applauded Competition and Fair Trading Commission (CFTC) for undertaking probe against five cooking oil company for overpricing of the product.
On 9 July, 2022 , Malawians wake up to the news that the Competition and Fair Trade Commission (CFTC) is investigating five cooking oil manufacturers for unwarranted pricing of their products after government removed the 16.5 percent value-added tax (VAT).
These reports were duly confirmed by CFTC spokesperson Innocent Helema who said the commission embarked on the probe against the manufacturing companies for their outrageous conduct on pricing of their cooking oil.
But in a random interview with the people of Lilongwe they are happy because these companies are stealing from Malawians.
Abdul Mmadi a vendor at Tsoka Market says he believe these companies be given heft punishment once this is fully concluded.
“These companies are stealing from Malawians and after this investigation, they should also investigate other companies too which are trading using high prices as well,” he said.
Mercy Banda another business lady from Lilongwe main market says Government should do more to ensure the companies are not taking advantage of the situation to deliberately increase the commodity prices.
Ministry of Trade and Industry in collaboration with the Competition and Fair Trading Commission (CFTC) in May this year, issued a final warning to all edible cooking oil retailers and suppliers that drastic action will be applicable to traders that are not abiding by the gazetted notice.
The Ministry and CFTC said government continues to observe with concern that since the removal of 16.5 percent Value-Added Tax (VAT), some suppliers and retailers across the country have still not yet reduced their prices.
In their statement signed by Hon. Mark Katsonga Phiri, Minister of Industry and Trade dated 29th April, 2022 said Government expected that by now, all the suppliers of edible cooking oil should have ceased and desisted from charging VAT on the said cooking oil as per the gazette notice.
“By copy of this Notice, all consumers across the country are hereby advised to report with immediate effect all the suppliers that have not yet reduced the prices to the Ministry of Trade and Industry for the Ministry’s urgent action,” reads part of the statement.
The Probing of the 5 companies came after CFTC, in April this year, started probing cooking oil prices following government’s removal of 16.5 percent VAT as one of the interventions towards reducing soaring prices of the commodity.
Helema said: “We have launched investigations against five cooking oil manufacturers for unconscionable conduct, specifically excessive pricing. This is as provided under Section 43(1) of the Competition and Fair Trading Act.”
However, Helema said the commission is yet to sanction any of the companies since they were still conducting investigations on the matter. He could also not disclose names of the companies under probe.
Cooking oil prices continue to rise irrespective of the removal of VAT due to the kwacha depreciation and alleged shortage of key raw materials on the back of global supply chain disruptions.
In May, Minister of Trade and Industry Mark Katsonga-Phiri warned that government would start invoking the law on manufacturers who would not reduce their prices.
Katsonga-Phiri could not confirm if any company has so far been penalized, but he told local media that he had issued instructions to the responsible officers.
“People on the ground should be aware. But not many people follow the law and business people, where money is concerned, are extremely difficult to handle. However, government is going by the book,” said Katsonga-Phiri.
He said the ministry was doing everything possible to ensure that companies were following the law as regards pricing of cooking oil and other products.
“For your information, we asked all manufacturers to give us their recommended retail prices of all essential commodities and whoever is found charging beyond recommended price will be dealt with,” said the Minister.
Figures provided by Cama show that from October 2020 to date, cooking oil prices have gone up by about 160 percent and yet Government reduced Vat which was giving Government K5 billion, surely Malawians expect low cooking oil prices.