Malta Chamber calls for stricter controls to eliminate unfair competition

The Malta Chamber today voiced its serious concern at the level of unfair competition which is being reported by its members in the importation and distribution sector. 

“The situation arises from a lack of effective enforcement allowing certain so-called ‘traders’ to go unpunished despite operating in total disregard of their regulatory responsibilities, including fiscal,” the chamber said.

The Malta Chamber said that it was monitoring the situation closely and recently received an escalated number of reports of unfairly lost sales from aggrieved members in a number of sectors such as wines and spirits, electronic goods, fast moving consumer goods, furniture and residential turn-key projects.

In its statement it stressed that this unlevel playing field, besides lower turnover and market share erosion of law-abiding companies, was also leading to loss of revenue to government.

The Malta Chamber added that if the unfair competition is addressed, it could significantly ease off pressure for further tax increases at a time when government is seeking to reduce its deficit.

Moreover, the lack of enforcement is leading to a decline in investment and employment opportunities among law-abiding businesses.

Malta Chamber also underlined the “high risks to consumer health and safety” and the insignificant price savings for consumers these practices were creating.

“All the above continues to arise because the country did not effectively replace border controls - which are no longer permissible with Malta being part of the Single European Market - with an appropriate market surveillance structure.”

Pointing out that government should make addressing the unfair competition a priority, the chamber said that it had consistently advocated the need for urgently setting up a multi-departmental single authority responsible for fair and effective market surveillance.

The authority, the chamber proposed, must be empowered with the necessary resources and executive powers to, “once and for all,” proactively enforce taxes, laws and regulations on persons that operate below the compliance radar and beyond the knowledge of any authority including fiscal. 

“To add insult to injury, due to a situation of scarce and fragmented resources, previous reports by the Malta Chamber on this situation have often resulted in the unaccaptable practice of bona fide traders being subjected to selective inspections,” it said.

Experience showed that companies with long and impeccable track records of fiscal compliance bore the brunt of scrutiny and inspections because this was the most convenient approach for enforcement officers.

The Malta Chamber stressed that it stands in favour of a liberalised and competitive business environment provided this is fair and in compliance with Malta’s legal, regulatory and fiscal obligations.

“Given the situation, the Malta Chamber is in the process of consolidating updated feedback from the various sectors it represents and shall shortly be delivering a comprehensive presentation to the Parliamentary Committee for Economic and Financial Affairs.”