At an Extraordinary Meeting of the SADC Standing Committee on Competition and Consumer Law and Policy today, chaired by Swaziland, SADC competition authorities approved and adopted detailed frameworks for future cooperation on mergers and cartel investigations.Read more
The Competition and Fair Trading Commission (CFTC) has noted with great concern that some companies in Malawi are consummating mergers or acquisitions without seeking authorization from the CFTC as provided for under the Competition and Fair Trading Act, Cap 48:09 of the Laws of Malawi (CFTA).
The Commission wishes to remind all persons who may have entered into a merger transaction without seeking authorisation from the Commission or those intending to enter into a merger transaction that they should seek authorisation from the CFTC. This will enable the Commission undertake a thorough assessment to determine whether the merger or acquisition is likely to result in substantial lessening of competition.
The Commission would, therefore, like to warn the business community that it is illegal for anyone to consummate a merger or an acquisition that is likely to negatively affect competition in any market in Malawi without authorisation from the Commission. The Commission will investigate any merger or acquisition for possible violation of the Act if the transaction is not voluntarily notified to the Commission. Parties to such merger transactions risk prosecution and huge penalties will be imposed on all firms found to have consummated mergers in violation of CFTA provisions.
CHARLOTTE WEZI MALONDA
The Board of Commissioners for the Competition and Fair Trading Commission (hereinafter referred to as "The Commission" held its 46th Meeting on 23rd September 2016 in the Board Room of the Competition and Fair Trading Commission Offices in Lilongwe. The Commission, among other things, considered applications for authorisation of the following proposed mergers.
2.0 Summary of the Commission’s Determinations of the Cases
A summary of the Commission's determinations on the applications for merger authorisations is presented below:
2.1. Acquisition of SABMiller plc by Anheuser-Bursch InBev SA/NV
The Commission noted that SABMiller plc submitted an application for authorisation of the acquisition of 100% shareholding in SABMiller plc by Anheuser-Bursch InBev SA/NV. It was submitted that both SABMiller and AB InBev were beer producing companies. In Malawi, SABMiller operates through Malawi Beverages Limited, Malawi Traditional Breweries Limited and Chibuku Products Limited while AB InBev was not physically present in Malawi. However, small quantities of AB InBev beer brands were being imported into Malawi by independent liquor sellers.
The Commission noted that the transaction would not change the market structure for clear beer in Malawi neither would it change other factors that influence competition. In its deliberations, the Commission determined that the transaction would not likely result in substantial lessening of competition in the clear beer market in Malawi. Therefore, the transaction was authorized but subject to conditions aimed at addressing public interest concerns that were identify. The public interest concerns identified relating to likely loss of employment and likely closure of some economic activities carried out by SABMiller subsidiaries. Therefore, the Commission ordered the parties to commit to the following undertakings:
2.2. Acquisition of Shareholding in Charter Insurance Company by Liberty Holdings Limited and Liberty Nominees (proprietary) Limited
The Commission noted that on 13th May, 2016, the Competition and Fair Trading Commission received an application from Charter Insurance Company Limited for authorisation of a proposed acquisition of 39% shares by Liberty Holdings Limited and 16% shares by Liberty Nominees (Proprietary) Limited. It was submitted that Liberty Holdings Limited and Liberty Nominees (Proprietary) Limited were affiliated companies based in South Africa and they deal in financial services. The target firm, Charter Insurance Company Limited, is a registered general insurance company operating in Malawi.
The Commission noted that investigations established that Liberty Holdings has no direct commercial presence in the general insurance market in Malawi hence the structure of the relevant market would remain the same post-merger. The Commission anticipated that the transaction would increase the capacity of Charter Insurance to underwrite risks apart from increasing employment prospects in the economy.
In view of the foregoing, the Commission authorised the transaction with the condition that the merging parties would not retrench staff.
2.3. Acquisition of Star Radio Limited by Trustees of Timveni Child and Youth Media Organisation
The Commission noted that on 23rd June, 2016 the Competition and Fair Trading Commission received an application from the registered Trustees of Timveni Child and Youth Media Organisation for authorisation of a proposed acquisition of 100% shareholding in Star Radio Limited.
It was submitted that Trustees of Timveni Child and Youth Media Organisation is an association incorporated in 2011 under the Trustees Incorporation Act. Timveni Child and Youth Media Organisation is an organisation that aims at empowering children and youth to realise their rights and participate fully in the national agenda. Furthermore, Timveni exists to promote youth talent.
The target firm Star Radio Limited is a private radio with a broadcasting license dated 4th April, 2014 which was granted by Malawi Communications Regulatory Authority. Star radio broadcasts a number of programmes which include entertainment, sports, education and religious programs to mention a few.
After a thorough assessment, the Commission established that the transaction would neither result in change of market structure nor competition factors. The analysis showed that the transaction would be beneficial to the general public since Timveni would be using Star Radio as a strategy to reach out and empower the youth with key messages about their rights.
The Commission further established that the merger would not likely result in substantial lessening of competition in Malawi. Accordingly, the Commission authorised acquisition of 100% shares of Star Radio Limited by Timveni Child and Youth Media Organisation.
CHARLOTTE WEZI MALONDA
The Competition and Fair Trading Commission would like to inform the general public and the business community that it has installed a Toll Free Line for registration of consumer complaints.
The toll free line number is 80008333 and is operational every Monday to Friday from 0730am - 1630hrs and is currently available on the MTL platform.
The toll free line facility will enable the general public and the business community to lodge complaints to the Commission, free of charge, relating to violations of the Competition and Fair Trading Act and the Consumer Protection Act. This will help create a highly competitive and fair trading environment for the ultimate benefit of consumers and business prosperity.
In view of this, the general public is advised to make use of this opportunity to report suspected unfair trade and anti-competitive practices to the Commission for appropriate redress.
Charlotte Wezi Malonda
The Executive Director
The Competition and Fair Trading Commission (CFTC) has noted with great concern that some prominent supermarkets in the country are intentionally engaged in deceptive pricing with a view to defraud unsuspecting consumers.
A recent inspection of the top ten supermarkets in the cities of Lilongwe and Blantyre showed that they were craftily engaged in the following deceptive practices;
In view of this, the Commission would like to warn all supermarkets that it is an offence, under the Competition and Fair Trading Act and Consumer Protection Act for any trader to engage in any form of deceptive or misleading conduct. It is also an offence for any trader to engage in any unfair or unconscionable tactics aimed at profiteering and taking advantage of consumers.
The Commission will take stern measures to deal with any supermarket that continues to engage in such malpractices. This will include "naming and shaming" and huge punitive fines to offending supermarkets in the hope that these penalties will motivate them to comply voluntarily with consumer protections laws.
Finally, the Commission wishes to advise the general public to ensure that they exercise caution when dealing with some of these supermarkets which are blatantly bent on defrauding unsuspecting consumers.If you encounter any of the conducts enumerated above, please report to the CFTC.
CHARLOTTE WEZI MALONDA
At its 45th meeting held at Mpikisano House in Lilongwe on 3rd June 2016, the Competition and Fair Trading Commission considered the application for authorisation for the proposed acquisition of 97.05% of shares owned by the Malawi Government in Indebank Ltd by National Bank of Malawi.
After thorough investigations to determine whether or not the acquisition would likely lessen competition, the Commission's findings were as follows:
In light of these findings, the Commission authorised the merger subject to the following conditions:
NOTES FOR EDITORS
The International Competition Network (ICN) has again recognised the Competition and Fair Trading Commission (CFTC) for the role it played in influencing reforms in the credit referencing market in Malawi.
Making the announcement on the results of the 2015 Competition Advocacy Contest, the World Bank Group, said the CFTC was one of the 18 competition authorities to be recognised out of the 43 competition authorities that participated in the contest.
Commenting on the recognition, CFTC Executive Director Charlotte Wezi Malonda said she was excited that reputable international competition authorities including the World Bank Group continue to acknowledge the outstanding work the Commission was doing in creating a competitive and fair market for all.
“The prestigious ICN / World Bank Group competition advocacy award is a highly sought after recognition by Competition authorities all over the world. We are greatly humbled to receive such a major award for the second year running. We are indebted to the government for its continued support to our work".
Credit Referencing, which is a new and fast growing industry in Malawi, provides credit profiles for borrowers. Because this information helps financial lending institutions to manage the risk of extending credit to borrowers, credit referencing firms contribute to lowering the cost of credit which in turn increases access to loan facilities for poor people.
As a result of the Commission's intervention, in 2015, Parliament amended the Credit Reference Act to allow banks to provide client information to credit reference bureaus without taking a risk of lawsuits. This has opened up the market to competition.
In 2015, the World Bank recognised the role the CFTC played in promoting pro-competitive reforms that foster growth and reduce inequality, specifically in the sugar industry.
Notes for Editors
3. The winners and honorable mentions of the 2015-2016 Competition Advocacy Contest were selected by the following panel:
Contacts for the Press Release
The Competition and Fair Trading Commission, a government agency mandated to safeguard competition and protect consumers from unfair trading practices, will on 15th March 2016 commemorate World Consumer Rights Day (WCRD).
The WCRD falls on 15th March of every year and is an annual occasion for celebration and solidarity within the international consumer movement on which participants observe the day by promoting the basic rights of all consumers, demanding that those rights are respected and protected.
The main events to commemorate the Day in Malawi will be a Consumers' Parade under the theme "Consumer Justice Now" which will be held in Balaka. Other activities will include drama, music, poetry, traditional dances, speeches and a competitive football match between local rivals.
Presiding over the event will be District Commissioner for Balaka, Mr Rodrick Mateauma and CFTC Executive Director, Charlotte Wezi Malonda.
Speaking ahead of the Day, Malonda said the CFTC recognises the important role that consumers play in the economy, hence the choice of the theme "Consumer Justice Now".
"Consumers create effective demand that induces productive sectors of the economy. Without consumers, there would be no production in the economy. This is the reason why we must join hands and lobby tirelessly for consumer justice across the country.
"Our campaign for consumer justice would be in vain if consumers themselves do not take a lead in safeguarding their rights. The process of safeguarding one's rights begins with awareness about the available mechanisms for reporting and penalizing infringement."
This year's theme was selected due to the increasing number of consumer rights violations, many of which go unreported due to lack of awareness.
Notes for Editors
1. CFTC is an autonomous agency of the government mandated to regulate, monitor, control and prevent acts or behaviour which are likely to adversely affect competition and fair trading in Malawi.
2. The CFTC is established under the laws of Malawi to enforce the Competition and Fair Trading Act and the Consumer Protection Act. It is dedicated to improving the efficiency of Malawi’s economy for the benefit of its consumers and all its people. This is done in four ways:
3. Historically, on March 15, 1962, President John F. Kennedy presented a speech to the United States Congress in which he extolled four basic consumer rights, later called theConsumer Bill of Rights. The United Nations through the United Nations Guidelines for Consumer Protection expanded these into eight rights, and thereafter Consumers International adopted these rights as a charter and started recognising March 15 as World Consumer Rights Day.
Contacts for the Press Release
Innocent HelemaTel: 01759506 / 0881 33 80 17