Competition and Fair Trading Commission (CFTC) plans to carry out a study in the poultry sector following complaints of anti-competitive tendencies among players.
In a written response on Friday, CFTC spokesperson Innocent Helema said there have been rising complaints from small and medium enterprises (SMEs) over alleged widespread unfair and anti-competitive practices in the sector.
He said: “To help form an informed opinion on the issue, the commission will undertake a comprehensive study to assess the state of play of competition and dynamics in the poultry market.
“Findings of the study will be used to determine what action the commission should take to promote competition and ensure that there is adequate protection for SMEs.”
Chamber for Small and Medium Enterprises Association executive secretary James Chiusti has welcomed the study, saying it is long overdue.
He said big players in the poultry sector control the whole value chain, resulting in small players being squeezed out of the market.
“Small poultry traders have literally failed to compete against the bigger players as they enjoy economies of scale; hence, offering their products at reduced prices,” said Chiutsi.
Rose Chimbiya, a small-scale poultry farmer in Chileka, Blantyre, said it is becoming harder to compete with bigger firms.
“For instance, I sell one live chicken at K3 000, but if you go to the market, you will find the same selling at K2 500 or less and consumers opt for cheaper ones.
“In the end, it is difficult to make sustainable returns,” she said.
The study is coming two months after Poultry Industry Association of Malawi (Piam) decried illegal importation of poultry products, which it argued put the industry under financial strain, affecting 3 000 jobs out of 24 000.
Piam chairperson Alexander Stewart could not be immediately reached for a fresh comment, but in an earlier statement he said the industry is concerned with continuous illegal importation of eggs and poultry feeds from Zambia and the continued importation of frozen chicken from Brazil.
Under Section 42 of the Competition and Fair Trading Act, one of the functions of CFTC is to monitor markets and determine where concentrations of economic power or anti-competitive trade practices exist whose impact on competition and the economy outweigh the efficiency advantages.
Among other things, the study will also seek to understand the structure of the poultry industry and assess its likely effect on competition.