Agius Saliba gets cross-party support for Brussels probe into Malta food prices

Labour MEP Alex Agius Saliba has won the support of all political groups inside the European Parliament’s petitions committee, to force the European Commission into investigating the alleged price controls on multiple brands directly controlled by major importers.

Cross-party support for Agius Saliba’s petition overcame an objection from the Commission not to initiate an investigation into the concentration of power in Malta’s food distribution market, to determine if dominant undertakings are exploiting their position.

Agius Saliba said food prices in Malta had been particularly affected by inflation, growing at their fastest rate in at least four years.

“Due to its size and geographical limitations, Malta has ended up with de facto monopolies at the distribution level where a handful of importers are dominating all the food chain market. This has created a situation of price adjustments and controls being done on multiple brands and products that are directly controlled by these importers, and aggressively protected by killing any parallel importation from smaller traders who could offer lower prices to the consumers,” Agius Saliba said.

While attributing this increase to several economic factors, both recent and longstanding, such as the impact of COVID and Malta’s peripheral position, the MEP contends that the principal local importers and distributors in Malta, who control the majority of the food chains market, are exploiting their dominant position creating de facto monopolies.

“These companies are taking advantage of the current economic situation at the expense of vulnerable consumers and unfairly inflating prices for personal profits.”

While MEPs from all parties from left and right in the petitions committee supported Agius Saliba’s bid, in Malta various business organisations took issue with the call for an investigation.

“Malta has its own set-up of authorities and clearly defined routes to handle concerns related to issues of competition, something the SME Chamber frequently uses to tackle abuse. Agius Saliba chose to disregard this and appeal to the European Commission to intervene and even called upon it to investigate Maltese businesses,” the Small Business Chamber (GRTU) said.

“The SME Chamber will not accept Maltese businesses to be made into scapegoats for cheap political advancements. It is clear this is an unwarranted attack fuelled by a negative strategy to gain visibility as part of the MEP election campaign, which is taking place in less than a year’s time.”

High inflation is generally attributed to a mix of global factors such as COVID, the Russian invasion of Ukraine, supply-chain bottlenecks, and labour shortages.

Agius Saliba’s request for investigation was also reflected by finance ministers Clyde Caruana’s assertions that a lack of competition in Maltese markets were the result of cartel behaviour between major players.

“If you had to look at each and every sector, the providers and suppliers are at best three or four. Whether it’s banking, telephony, whatever – it’s made up of cartels, there aren’t too many suppliers,” the minister said.

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Cartels are illegal, anti-competitive arrangements between two or more independent operators that seek to control supply or prices, by fixing prices, or cap the supply of goods to the market.

Caruana implied that cartels thrive in smaller markets, where it is easier to seize a commanding share of a market. “When you have markets which are small, intrinsically there’s going to be a problem with respect to competition. We see it in all markets and it’s very difficult to address that,” he said.

Caruana said that Malta’s problems with price inflation was also down to “an element of greed inflation. Even ECB president Lagarde said there are signs of that across member states, so we don’t stand out,” the minister said. “Given that competition is what it is in our market, one would expect a higher degree of such elements.”