Illovo Malawi abolishes sugar distributors, quotas

Illovo Sugar Malawi Limited says it has now liberalized local sugar distribution and is now allowing anyone interested to participate in the selling of the product.

The company said the public is free to purchase sugar for wholesale or retail purposes without any restrictions or the need for a licence but said interests person would be required to register with the company so that they open an account with the company for business transactions.

“Once this simple process has been fulfilled, you will be required to purchase sugar based on a minimum order of one metric tonne. This is different from the past when appointed sugar distributors were awarded quotas to sell sugar in a specific location within a specified period,” the company said in a statement seen by Nyasa Times.

The company further said it subsidizes the cost of sugar transportation by taking responsibility of primary distribution from the Mills to distribution centres.

Bishop Simama: Sugar deal triggers controversy
Bishop Simama: Sugar deal triggers controversy

“The company wishes to advise that sugar is available for collection from its distribution centres in Limbe, Balaka, Lilongwe, Mzuzu and Karonga and from its Mill warehouses in Nchalo and Dwangwa,” it said.

However, following complaints from other businesspersons in Karonga district that Bishop Abraham Simama’s monopoly on the sugar business was stifling other businesspersons, the Malawi Competitions Commission launched an intensive investigation and validated the allegations.

“It was established that small scale sugar wholesalers (in Karonga) are blocked by Simama General Dealers to buy Sugar directly from Illovo through various tricks including non disclosure of information to other wholesalers about procedures for paying for sugar orders and in some cases provision of false information about sugar non availability at the distribution centre,” the Commission said in a statement.

The Commission further established that because of this, small-scale sugar wholesalers are forced to buy sugar from Simama General Dealers or Pezani General Dealers (an affiliate of Simama General Dealers) at a price higher than ex-factory price.

“Consequently, the wholesalers sell to retailers at a price higher. Consumers therefore end up buying sugar at a price higher than the normal market price,” reads the statement in part.

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