Nico Life, Goodwill Funeral Services fined
Consumers Association of Malawi (Cama) has hailed the Competition and Fair Trade Commission (CFTC) for swiftly moving to protect consumers by exposing uncompetitive trading engaged by Nico Life Insurance Company and Goodwill Funeral Services.
Cama executive director John Kapito shared the sentiments in an interview on Tuesday in reaction to CFTC’s decision to fine the two firms for engaging in business practices deemed to be uncompetitive.
He observed that consumers continue to suffer by paying high tariffs as a result of uncompetitive practices that are common on the market.
“These two are just an example of service businesses which are conniving to rip off consumers. We encourage the CFTC to investigate other cartels on the market who rip off consumers,” said Kapito.
In June last year, the CFTC launched an investigation into alleged anti-competitive and unfair trading conduct by some players in the provision of funeral services.
The probe followed a complaint submitted to the commission by some funeral service providers alleging that Goodwill Funeral Services sealed an agreement with Nico Life Insurance Company Limited to exclusively provide funeral services to members of the Medical Aid Society of Malawi (Masm).
But in a statement made available to Business News on Tuesday, CFTC announced that they deliberated on the evidence gathered in the case and found that the conduct and decisions by Goodwill and Nico Life resulted in the prevention and distortion of the funeral services market.
The statement signed by CFTC acting executive director Apoche Itimu indicated that the commission established that the agreement between Nico Life and Masm did not contain anti-competitive clauses and further that following the entry into force of the agreement, Masm ceased to deal directly with funeral service providers who were to deal directly with Nico Life.
She, however, indicated that the commission found that although the written agreement between Nico Life and Goodwill did not contain anti-competitive agreements, they had an oral agreement that was anti-competitive and further that they made decisions and engaged in concerted practices that were anti-competitive in violation of Section 32(1) of the Competition and Fair Trading Act.
Itimu said: “The findings of investigation revealed that following the agreement between Nico Life and Masm, Nico Life and Goodwill decided that Goodwill would be the only approved funeral service provider for Masm members.”
She said the commission noted that Nico Life and Goodwill reached this agreement without affording other providers the opportunity to be registered by Nico Life.
“Where members obtained funeral services from other funeral service providers other than Goodwill, Nico Life would only process their payments if the claims were made through Goodwill [their competitor]despite that they had no subcontract with Goodwill,” she said.
In light of the findings, the commission ordered Nico Life to open up to other funeral service providers by entering into agreements with them through competitive bidding processes and a fine of K500 000 for engaging in anticompetitive conduct.
CFTC has also ordered Goodwill to pay a fine of K68 736 941 being financial gain generated from engaging in the anticompetitive conduct.
When drawn to comment on the matter, Goodwill Funeral Services managing director Anderson Green Mankhusu acknowledged receiving communication from the CFTC.
“Our board will meet to determine way forward so that we respond within the time the CFTC has given,” he said. Nico Life Insurance Company chief executive officer Eric Chapola was yet to respond to our query on the mater by press time.
