Ministry of Trade has warned that it will penalise wholesale poultry producers who violate their licence mandate by unfairly venturing into retail trade.
The development comes amid a protracted conflict where major poultry wholesalers have been delving into retail trade to the disadvantage of retail traders and small poultry producers.
In a written response on Tuesday, Minister of Trade Sosten Gwengwe admitted that when big companies start selling in retail markets at wholesale prices, small poultry farmers cannot survive.
He said poultry wholesale distribution licence only applies to specific designated places, adding that big poultry companies can do more to support small and medium enterprises (SMEs) by trading fairly.
Said Gwengwe: “Within two weeks, they [wholesalers] will submit distribution points. Their licence for moving vehicle depends on strict adherence to this arrangement.
“They have committed to install vehicle surveillance gadgets. If they are in contravention, moving vehicles will be stopped all together.”
The move by the Ministry of Trade comes weeks after the Competition and Fair Trading Commission (CFTC) revealed plans to carry out a study in the poultry sector following complaints of anti-competitive tendencies among players.
Among other things, the study will also seek to understand the structure of the poultry industry and assess its likely effect on competition.
In a statement, Poultry Industry Association of Malawi chairperson Alexander Stewart said they resolved to respect their trading licences following a meeting with Minister of Trade for the mutual benefit and in the interest of growing the poultry industry.
He said they will be vigilant to deal with illegal importation of poultry and poultry products that are suffocating the industry.
CFTC spokesperson Innocent Helema in an interview on Tuesday explained that there have been rising complaints from SMEs over alleged widespread unfair and anti-competitive practices in the poultry sector.
He said 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.
The poultry industry is also challenged by the illegal importation of poultry products that is putting the industry under financial strain and has affected about 12.5 percent of 24 000 jobs.