The Competition and Fair Trading 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).
CFTC spokesperson Innocent Helema said in an interview the commission embarked on the probe against the manufacturing companies for their outrageous conduct on pricing of their cooking oil.
The development 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.
Said Helema: “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.”
Imported cooking oils once filled our shelves
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 our sister newspaper Weekend Nation 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.
According to Katsonga-Phiri, Malawi Revenue Authority (MRA) collects over K5 billion annually through VAT on cooking oil alone.
In May, his ministry published recommended prices for various cooking oil brands, a development that led to the running out of locally-produced cooking oil in many retail shops, especially in the cities of Mzuzu, Lilongwe and Blantyre.
But Oilseeds Producers and Processors Association president Peter Ngoma attributed the shortage of the commodity to acute forex shortage.
He said the scarcity of cooking oil had nothing to do with the prices announced by government as that was agreed by both producers and the government in view of removal of VAT.
Consumers Association of Malawi (Cama) executive director John Kapito observed that government’s move to regulate cooking oil prices would distort the market.
Figures provided by Cama show that from October 2020 to date, cooking oil prices have gone up by about 160 percent