* Consumers side with companies’ decisions to raise prices of their products as the goverment is failing to control high prices of raw materials
* If they want they should subsidise the price of bread because the Minister of Trade said the government has found a strategy to stop the price hikes
By Duncan Mlanjira
The public waiting to see if the ruling by the High Court in Blantyre — overturning an interim order obtained by the Competition & Fair Trading Commission (CFTC), that blocked Bakers Pride and Kingmeal from raising the prices of their bread products — will effectively apply to 11 other companies the CFTC also slapped with the same order last month, on January 28.
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The companies are nine farm input distribution companies (Export Trading Group (ETG), Farmers World, Malawi Fertilizer Company, Dalitso General Supplies, Paramount Holdings Limited, Optichem 2000 Limited, Rabs Processors Limited, Brussels Fertilizers Limited and Agora Limited) and two poultry feed manufacturing companies (CP Feeds and Proto Feeds).
The interim order required them to cease and desist from engaging in excessive pricing and unconscionable conduct, quoting Section 23 of the Competition and Fair Trading Act (CFTA) that gives powers to the Commission “to issue an interim order requesting an enterprise to stop engaging in conduct where the Commission, before it reaches a final decision on a matter, believes, on reasonable grounds, that an enterprise has engaged, is engaging, or is proposing to engage, in conduct that constitutes or may constitute an infringement of the Act”.
CFTC indicated that the Order “is issued where it is necessary for the Commission to act as a matter of urgency in preventing serious, irreparable damage to any person or category of persons; or protecting the public interest”.
Under the issued interim orders, CFTC said the 11 companies were “not to increase prices and not to hoard the supply of the respective products they sell on the market until a determination is made on the matter”.
“It must be noted that failure to comply with the issued orders shall result into criminal prosecution in the court of law and execution in accordance to Section 70 of the Act,” warned the CFTC’s Chief Executive Officer, Lloyds Vincent Nkhoma in the public statement on January 28.
The same interim order was issued on Bakers Pride and Kingmeal on February 4 not to increase prices of bread but the two companies sought legal relief through the High Court, which granted them a stay order for CFTC not to force them not to hike their prices.
The Court weighed in and looked at the economic trends at the moment and decided to vacate the interim order and according to a legal expert, the ruling means Malawians must brace for tough times ahead as it now “free for all” for companies to raise.
The legal mind alludes that the other 11 companies in the agriculture sector can also apply have their interim orders vacated as a stay order as a precedent made by the High Court in Blantyre.
Bakers Pride announced a significant hike in the prices of bread and other baked goods, which attributed to the rising production costs of raw materials such as wheat flour, yeast and other essential ingredients.
While in cognizant that this is expected to impact households and businesses alike, Bakers Pride assured customers that the price hike is necessary to ensure the continued quality and freshness of their products.
Commenting on Facebook after the court ruling, Yahya Chauluka sided with the bread manufacturers, saying the government shouldn’t “force companies to lower prices of finished goods yet it is failing to control prices of raw materials like maize, wheat floor, electricity, cooking oil etc”.
He expressed surprise that if this is what Minister of Trade, Sosten Gwengwe recently assured Malawians that government has found a strategy to stop the price hikes.
Others discerned that when Minister Gwengwe said they had come up with measures to control price of goods, he laughed, saying: “Not because I am happy things are ultra expensive but because we know these guys are clueless.
“I mean, prices of goods have been going up since these guys took power, where were they kuti azikanamiza anthu lero kuti apeza njira? Last time when they made another interim order, we said it again that you can’t keep forcing business people to lower the prices while the cost of production is high. Never, that’s a failed strategy, you can’t rule by intimidation in this era.”
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Another thought suggested that perhaps the government should just subsidise the price of bread instead of ordering companies from adjusting prices of their products to meet the cost of raw materials, which require access to the scarce forex.
It was also observed that the price of bread was at K350 in 2020 but within 4 years, it now has reach up to over K5,000 pin — Maxton Manyembe commenting: “There is no way the MCP-led government can do now to control the inflation of the kwacha.”
Raymond Mselera expressed the fear that as prices of basic household commodities are on the increase by the hour, what will the situation be once fuel prices, which the government is subsidising, will be allowed to be increased?
To which Chisomo David responded to say transport fares are also rising in order to meet the demand of rise of prices of basic commodities, giving an example that the stretch from Malosa to Zomba City is now at K6,000, which was at K2,000 in August last year.
Meanwhile, Civil Servants Trade Union of Malawi (CSTUM) and Teachers Union of Malawi (TUM) planned to hold an industrial strike today but deferred after negotiations continued, in which they are demanding from government a fair salary adjustment and allowance increase.
In a joint letter to all civil servants, CSTUM president, Charles Kumchenga and his counterpart for TUM, Willy Malimba issued yesterday, February 24, says their negotiations with government negotiation team last Friday ended without an agreement.
“Despite our efforts to address our grievances, the government has failed to meet our demands for a fair salary adjustment and allowance increase,” says the letter. “The government’s offer of a 10% salary hike is an insult, considering the skyrocketing prices of commodities.
“As civil servants, we contribute significantly to the development of our nation, yet our hard work and dedication are not appreciated. Instead, the government sees fit to increase their own salaries by 100%, as evidenced by the 100% salary hike for members of parliament in the last financial fiscal year budget.”
The leaders contend that civil servants carry out “a commendable job in developing the nation” and being offered “a mere 15% increase is unacceptable, and will not stand for it — enough is enough, we are tired of being taken for granted”.
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