Following complaints from other business persons, the Competition and Fair-Trading Commission (CFTC) has launched an investigation on Castel Malawi Limited’s prices management on its products.
CFTC public relations officer Innocent Helema confirmed with The Atlas Malawi that they have opened investigations on the company’s two conducts, Exclusive Dealing Agreements and Resale price maintenance (RPM).
An exclusive dealing arrangement is a business practice in which a seller or supplier requires a buyer to purchase a product exclusively from them, and not from any other competing suppliers. This can create barriers to entry for other suppliers and limit competition in the market.
While RPM is an agreement between a supplier and a reseller, preventing the reseller from setting its own prices. The agreement may specify a minimum resale price or a specified minimum margin, decided by the supplier.
Helema said the Commission commenced the investigations because exclusive dealing and resale price maintenance are some of the trade practices which are prohibited by the Competition and Fair-Trading Act.
“However, businesses may apply for authorization of such practices giving justifications as why they should be allowed to engage in the same. Castel Malawi Limited, in this regard, applied for authorization of the two conducts.
“The Commission is, therefore, conducting the investigations to understand the extent to which Castel Malawi Limited engages in the two conducts and the advantages and disadvantages of such to consumers and the economy at large. The Commission will make its determination on the applications following the conclusion of the investigations,” he said
An alcoholic beverages producer, Castel Malawi sells Castel, Kuche Kuche, Malawi Gin and Malawi Brandy among others.
