Tuesday, May 28, 2024

Illovo Sugar Malawi Secures Injunction Against Price Reduction Order and Prosecution Threat

The High Court Commercial Division has issued a stay order in favor of Illovo Sugar Malawi, effectively halting the Competition and Fair Trading Commission (CFTC) from implementing its decision to reduce sugar prices while the matter is under appeal.

This move comes after the CFTC recommended potential legal action against Illovo Sugar Malawi plc (ISM) for alleged unethical and deceptive practices related to a sugar price hike. ISM had initially raised sugar prices in an effort to combat the suspected smuggling of sugar out of the country. However, following numerous complaints, CFTC’s executive director, Lloyds Vincent Nkhoma, revealed in a press conference in Lilongwe that the Commission’s investigation concluded the price increase was unjustifiable, irrational, and had negative impacts on consumers.

He said: “That ISM should be prosecuted for violating S43 (1) (g) of the CFTA. The investigations report has been submitted to the office of the Director of Public Prosecutions (DPP) for prosecution.

Following its findings, the Commission subsequently provided guidance to the Ministry of Trade and Industry, emphasizing the need to prevent the protection of essential goods like sugar from import competition in cases where domestic entities, operating under the Control of Goods Act, are misusing their dominant market positions or engaging in unfair trade practices.

However, with this injunction, Illovo Sugar Malawi can now breathe a sigh of relief.

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