Friday, July 10, 2020
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EXCESSIVE PRICING OF BUS SERVICES DUE TO COVID 19 AND ENFORCEMENT OF BUS FARE TABLES

The Ministry of Transport and Public Works and the Competition and Fair Trading Commission (CFTC) have noted with great concern that a number of minibuses and buses are taking advantage of the global COVID 19 pandemic to exploit passengers by charging excessive and unreasonable bus fares.

A market surveillance and price monitoring exercise jointly carried out by the Commission and the Ministry of Transport and Public Works showed that, despite two consecutive downward fuel price adjustments, bus fares had increased by unreasonably high margins ranging from 40% to 200%. By charging excessively despite the substantial fuel price reductions, bus operators are in serious breach of Section 43 of the Competition and Fair Trading Act and the Consumer Protection Act.

In assessing whether fares were excessive or not, the Ministry of Transport and Public Works and the Commission took into account prevailing fares by the same bus operators prior to the COVID outbreak as benchmark fares. After wide stakeholder consultations involving the Public Transport Association, Minibus Owners Association of Malawi, Passenger Welfare Association and Malawi Police Service, the Ministry and the Commission determined that any bus fare increase by a margin of more than 40% constituted excessive pricing in blatant violation of the Competition and Fair Trading Act.

Further, the joint market surveillance revealed that Owners of Minibuses and Buses were not complying with Road Traffic Regulations which require bus operators to display fare-tables or fare charts. Precisely, Regulation 10(2) of the Road Traffic (Public Service Vehicles) (Operation) Regulations of 2000 stipulates that:

 

No person shall cause or permit a bus to be used on a road unless the conductor or where there is no conductor, the driver has available a fare-table for the route on which such bus is operating.

The Regulations further stipulate that fare-tables shall be produced on request to any person reasonably requiring to examine such fare-tables.

In view of the foregoing, the Ministry and the Commission wish to advise all Minibus and Bus Owners that from Monday 15th June 2020, there will be enhanced joint Enforcement and Surveillance activities on all routes to be carried out by the Directorate of Road Traffic and Safety Services (DRTSS) and the Competition and Fair Trading Commission. The purpose of this joint exercise is to enforce compliance with Road Traffic Regulations, the Competition and Fair Trading Act and the Consumer Protection Act.

The Ministry and the Commission further wish to appeal to the general public to report all Minibus or Bus operators who do not display or supply them with bus fare-tables and are charging excessively to the following numbers:

  • DRTSS TollFreeLine:4040(for Airtel subscribers only)
  • Southern Region: 0995008495 & 0995008502
  • Eastern Region: 0995008509 & 0995008456
  • Central Region: 0995008482 & 0995008483
  • Northern Region: 0995008506 & 0995008459
  • CFTToll FreeLine:2489 (for Airtel &TNM subscribers nly)

For more information or clarification, you may contact the Ministry’s Spokesperson, Mr James Chakwera on 0888202147 email: This email address is being protected from spambots. You need JavaScript enabled to view it. or the Commission’s Public Relations Officer, Mr Innocent Helema on 0880725075; email: This email address is being protected from spambots. You need JavaScript enabled to view it. / This email address is being protected from spambots. You need JavaScript enabled to view it.


 

FRANCIS B. CHINSINGA                                                                 JAMES KAPHALE 

SECRETARY FOR TRANSPORT & PUBLIC WORKS              EXECUTIVE DIRECTOR  

MoTPW                                                                                         CFTC

SUSPECTED EXPLOITATION OF SMALL AND MEDIUM ENTERPRISES (SMEs) IN THE SUPPLY OF IMPORTED SECOND HAND PRODUCTS (KAUNJIKA)

The Competition and Fair Trading Commission (CFTC) has noted with great concern that some dishonest wholesalers are engaging in deceptive and abusive trading practices in the supply of imported second hand products, which are commonly known as Kaunjika.

An inspection conducted by the Commission in the market for second hand clothes and shoes (Kaunjika) to assess compliance with competition and fair trading laws, showed that there was rampant economic exploitation of Small and Medium Enterprises (SMEs). The economic exploitation of the SMEs manifested itself through numerous deceptive and abusive practices perpetrated by wholesalers, resulting into unfair conditions of trade.

Examples of these deceptive and abusive practices are as follows:

  • Underweight supply – Bales expected to weigh 25kg and 65kg were weighing far less than 20kg and 55 kg respectively in violation of Section 43(1)(d) of the Competition and Fair Trading Act (CFTA).
  • Insufficient labelling – Bales had no price labels; no weight labels; no content labels or description and no quality category labels. This made it difficult for SMEs to make informed purchase decisions.
  • Non issuance of receipts as evidence of purchase in violation of Section 36 (1) of the Consumer Protection Act (CPA).
  • Non display of trading licences and trading names in violation of the Business Licencing Act.
  • Denying SMEs an opportunity to choose bales of their choice in violation of the Sale of Goods Act which provides for the right to examine the quality and quantity of goods;
  • Refusal to supply bales of second hand products to certain SMEs or class of SMEs.

  

The economic protection of SMEs is consistent with three of the primary objectives of the Competition and Fair Trading Act, which are: to strengthen efficiency in the production and distribution of goods and services; to secure the best possible conditions for the freedom of trade; and to facilitate the expansion of the entrepreneurship base.

The conduct of supplying underweight products and the failure to supply products with sufficient information constitutes serious infringement of the CFTA. Specifically, Section 43(1)(d) of the CFTA, makes it an offence for any trader to engage in conduct likely to mislead the public as to the nature, price, characteristics, suitability for a given purpose, quantity or quality of any products or services

Likewise, the refusal to sell to certain SMEs or a class of SMEs and the refusal to allow the freedom of choice, infringes on the rights of SMEs to participate fairly in the national economy. It also constitutes unreasonable, abusive terms and conditions of trade in gross violation of Section 43(1)(g) of the CFTA.

In view of this, the Commission wishes to warn dishonest wholesalers that it will take drastic action against anyone found engaging in deceptive or abusive trade practices against SMEs.

For more information, contact Innocent Helema on 0880 725 075 or email This email address is being protected from spambots. You need JavaScript enabled to view it. / This email address is being protected from spambots. You need JavaScript enabled to view it.

JAMES KAPHALE

EXECUTIVE DIRECTOR

RECENT DECISIONS BY THE BOARD OF COMMISSIONERS OF THE COMPETITION AND FAIR TRADING COMMISSION

The Board of Commissioners of the Competition and Fair Trading Commission (CFTC) held an Extra Ordinary Board Meeting in Lilongwe on 24th April 2020, to consider and adjudicate over cases. Specifically, the meeting was convened to deliberate on cases of alleged unfair trading practices in relation to the supply of essential protective and preventive equipment used in the management of the global COVID-19 pandemic.

In total, the Commission considered and adjudicated over a total of 16 cases. During the meeting, the Board imposed fines to eight pharmacy shops for unconscionable conduct, specifically excessive pricing, which is against Section 43(1) (g) of the Competition and Fair Trading Act (CFTA).Read more

Download the Recent Decisions By the Board Of Commissioners Of the Competition And Fair Trading Commission

SUSPECTED COLLUSIVE PRACTICES AND UNCONSCIONABLE CONDUCT BY INDEPENDENT SCHOOLS

The Competition and Fair Trading Commission has noted with great concern that there are some independent schools that are taking advantage of the global Corona Virus pandemic to engage in prohibited unfair trading and anti-competitive practices.

According to market intelligence received by the Commission, some independent schools are engaged in discussions with each other and sharing information about the level of school fees to be applied for Online Learning Programmes. The online learning programmes are a novel innovation by independent schools to continue delivering course content during the COVID 19 school lockdown.

The practice of exchanging commercial information such as pricing intentions or pricing formulae among competitors constitutes collusion, which is a blatant infringement of Section 33 of the Competition and Fair Trading Act (CFTA). Likewise, it is an offence for competitors to agree on the level of discount or fee reduction to be applied.

Further, the Commission has noted rising consumer complaints alleging that some independent schools are engaged in unconscionable conduct in the pricing of Online Learning Programmes. According to the complaints received, some independent schools are demanding the payment of full school fees for online learning, despite that students are not able to access all essential school services such as library and extra-curricular facilities.

While the Commission applauds the essential services provided by independent schools to the lives of many children, it is important that the services are delivered within the confines of the Competition and Fair Trading Act and the Consumer Protection Act.

In this regard, the Commission wishes to appeal to all independent schools to directly engage parents and come up with a win-win scenario that allows the schools to continue functioning as a business without unfairly exploiting parents who want their children to learn.

The Commission will not tolerate any unfair trading or anti-competitive practice in any sector intended to exploit consumers in the wake of COVID 19.

Independent schools found engaged in prohibited unfair trading or anti-competitive practices will be fined.

For more information, you may contact the Commission on email: This email address is being protected from spambots. You need JavaScript enabled to view it. / This email address is being protected from spambots. You need JavaScript enabled to view it. or Tel: +2653100014440.

JAMES KAPHALE

EXECUTIVE DIRECTOR

PROTECTING CONSUMERS FROM DECEPTIVE PRACTICES DURING THE CORONA VIRUS OUTBREAK

In the wake of the Corona Virus, the Competition and Fair Trading Commission wishes to inform the general public that there are some unscrupulous traders and companies that are taking advantage of the situation to promote certain products as cure or treatment for the Corona Virus.

According to international health authorities, there is no medically tested and approved product which can cure the Corona Virus. As such, any trader or merchant found representing that their product can cure the Corona Virus would be violating the Competition and Fair Trading Act (CFTA) and the Consumer Protection Act (CPA). Likewise, any merchant found pricing excessively would be infringing the law.

Section 43(1)(d) of the CFTA states that a person shall not, in relation to a consumer, engage in conduct that is likely to mislead the public as to the nature, price, availability, characteristics, suitability for a given purpose, quantity or quality of any products or services.

The Commission will impose stiff sanctions against any business person found engaging in deceptive practices or any other trade malpractices such as excessive pricing in the supply of products intended to fight the Corona Virus.

Finally, the Commission is appealing to all consumers to observe laid down health rules including washing hands and reducing unnecessary travel as ways of mitigating the spread of the Corona Virus.

For more information, you may contact the Commission on email: This email address is being protected from spambots. You need JavaScript enabled to view it. / This email address is being protected from spambots. You need JavaScript enabled to view it. or Tel: +2653100014440.

JAMES KAPHALE

EXECUTIVE DIRECTOR

LATEST DECISIONS BY THE COMPETITION AND FAIR TRADING COMMISSION

The Competition and Fair Trading Commission held its 54th Meeting in Blantyre recently 29th January 2020 to consider and adjudicate over competition and consumer protection cases. These cases were brought before the Commission in accordance with Section 8 of the Competition and Fair Trading Act.

In total, the Commission adjudicated over seventy-two (72) cases of which twenty-four (24) were on alleged unfair trading practices; 19 on Restrictive Business Practices, twenty-three (23) were on COMESA Mergers while six (6) were on local mergers.

Click here to download a full media Statement

RECALL OF 400G “PILCHARDS IN TOMATO SAUCE” AND “PILCHARDS IN CHILLI SAUCE” PRODUCTS

FOR IMMEDIATE RELEASE:2 MARCH 2020

The Competition and Fair Trading Commission would like to inform the general public that West Point Processors (South Africa) has recalled two batches of pilchards (tinned fish) products from the market. The recalled products - 400g “Pilchards in Tomato Sauce” and “Pilchards in Chilli Sauce” - have batch codes starting with ZST2 and ZSC2.

 

According to the company, there was a canning deficiency which could render the recalled products unfit for human consumption. The affected brands were as follows: Cape Point, Saldanha, Shoprite Ritebrand, Checkers Housebrand, U-brand and OK Housebrand".

 

From 24-28th February 2020, the Commission conducted a market surveillance in major supermarkets in Malawi to assess the presence of the defective batches of the pilchards on the market. The surveillance established that one of the recalled batches Saldanha ZST2 8DSM B1 00:00 whose expiry date is provided as 19/04/2021 was available on the market. Accordingly, the Commission ordered the supermarket to quarantine the product and dispose it off with the help of the Ministry of Health and the Public Health Department of the Lilongwe City Council.

 

The Commission would like to appeal to all local supermarkets to immediately recall the defective products and provide a full refund to consumers who bought them. Any supermarket which does not recall the defective products risks facing appropriate sanctions under the Competition and Fair Trading Act and Consumer Protection Act.

 

The Commission is advising consumers to critically check the material information on pilchards before purchasing or consuming the same. Further, the Commission wishes to advise consumers who may already have purchased the recalled products to return the same to the suppliers for proper disposition.

 

James Kaphale

EXECUTIVE DIRECTOR

Request for Information and Views Regarding the Acquisition of Assets of Kulimba Cement Limited by Lafarge Cement (Malawi) Limited

As required under Section 36 of the Competition and Fair Trading Act, the Competition and Fair Trading Commission has received an application for authorization of a proposed acquisition of assets of Kulimba Cement Limited (hereinafter referred to as “Kulimba Cement”) by Lafarge Cement (Malawi) Limited (hereinafter referred to as “Lafarge Cement”) and together referred to as “the parties”.

 

According to the information submitted by the parties, the acquiring undertaking, Lafarge Cement, is a subsidiary of LafargeHolcim, a limited liability firm in the business of building materials incorporated under the laws of Switzerland and has its headquarters in Paris, France. The key products offered by LafargeHolcim are cement, construction aggregates, asphalt production and concrete. In addition, the company operates in eighty (80) countries. LafargeHolcim has seventy-five thousand (75,000) employees worldwide, more than two thousand and three hundred (2300) plants (including one thousand four hundred and forty-eight (1,448) ready mix concrete sites and over two hundred and seventy (270) cement plants. In Malawi, LafargeHolcim trades as Lafarge Cement (Malawi) Limited and has its headquarters in Makata heavy industrial area, Blantyre.

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