On 28th June, 2023, CFTC received an application from Castel Malawi Limited for an Exclusive Dealing Arrangement (EDA) and Resale Price Maintenance (RPM) with its distributors of clear beer and spirits.
- The assessment of the transaction revealed the following as regards EDA:
- That it will not substantially affect competition in the relevant market.
- That it will improve product/service availability/delivery across the country.
- That it will enable Castel to transfer knowledge and skills to its distributors through the continuous specialized training support.
- That it will not affect the distribution and availability of rival products since there are several distribution channels including own distributor networks that traders use to reach out to their respective customers.
- That there are some distributors that are non-exclusive, and would be offering the competitors’ products.
The assessment also established the following as regards RPM
1. That the fixed resale price maintenance is tantamount to price fixing and, therefore, anticompetitive as distributors are not allowed to compete on price.
Upon deliberation, the Commission authorized the proposed Exclusive Dealing Arrangement (EDA) and Resale Price Maintenance (RPM) between Castel and its distributors with condition that Castel should be recommending a maximum resale price maintenance to allow distributors compete below the set price.