Competition Commission investigates Moam

The Malawi Competition and Fair Trading Commission (MCTFC) has instituted investigations against the Minibus Owners Association of Malawi (Moam) on minibus fare hikes.

MCTFC acting executive director Wezi Malonda argues that Moam contravenes the law in raising fares whenever fuel goes up.

“It has come to our attention that there appears to be a matter of possible violation under Section 32 (1) and 34 (1) b of the Competition and Fair Trading Act, Cap 48:09 of the laws of Malawi in relation to restriction and distortion of competition and price fixing in the minibus transport sector after the devaluation and increase of fuel prices,” she explained.

Malonda noted that the Commission is mandated under the Competition and Fair Trading Act to ensure that there is fair trading between traders and consumers in all market segments in Malawi.

She said the conduct by Moam appears to be in contravention of the Act which is anti-competitive and restrictive business practices.

‘Owners should set own price’

MCFTC director of mergers and acquisitions Richard Chiputula said Moam is not even supposed to regulate the minibus fare, arguing that under the Competitions and Fair Trading Act that is illegal.

“Each operator is supposed to set their own prices based on their own costs of production. Any process of discussion among business operators to adjust prices is prohibited. The idea is to encourage competition and not collusion because if there is collusion, it is the consumer who suffers and in this case, minibus passengers,” he said.

Efforts to reach Moam secretary general Coaxley Kamange proved futile as his phone could not be reached.

But Consumers Association of Malawi (Cama) executive director John Kapito said most traders have taken advantage of the recent fuel price rise to hike fares, tariffs and prices of various goods and services without any regard to consumers’ welfare.

He said Moam is not supposed to raise fares anyhow as its existence is in the hands of consumers.

“The fact that consumers have no alternatives now in terms of transportation should not be a passport for anybody to take advantage of the many poor masses by introducing unfair business practices as Moam is doing.

“If government had initiated other modes of transportation to assist the many poor people and if we had an effective commission on competition and fair trade, all these issues would have been regulated and controlled,” he said.

‘Weak institutions’

Kapito noted that Malawians are lucky to have many bodies and policies established under the Competition and Fair Trading Act whose role is to protect consumers from traders, but argued that these bodies are weak in structure and articulation of what they are supposed to be doing.

“These are bodies that have decided to simply become paper institutions, useless and irrelevant for the purposes they were established and they continue to be weak at a time consumers need them most as they are much distanced from the very same people they are supposed to protect,” he said.

Kapito argued that both the Consumer Protection Law and Competition and Fair Trading Act have the components that would have mitigated the current challenges being faced by consumers.

“These are two key laws that as consumers’ body we lobbied heavily and ensured that they are passed by Parliament, but their operations have been very poor and therefore the two have not assisted the consumer, especially now in these difficult times,” he said.