European Commission tells Malta to investigate collusive food prices locally

Collusive pricing in local food products should be investigated by Malta’s consumer affairs authority, the European Commission said in a letter to MEP candidate Peter Agius.

Last month, Labour MEP Alex Agius Saliba asked the European Commission to investigate de-facto monopolies in the distribution sector, which he says are contributing to food inflation.

“The lack of competition has removed the market-driven downward pressure on prices and led to the formation of informal, artificially high, price benchmarks. These benchmarks, set by long-standing tacit convention, enable the few large operators involved to exploit the high inflation rate to increase their already hefty profits,” he told the Commission.

But Nationalist MEP candidate Peter Agius then wrote to the Commission asking whether it can investigate collusive practices in Member States.

A spokesperson for the Commission’s directorate-general for competition told Agius that, when collusive practices are limited to a single Member State, it is the national competent authority that is most well-placed to deal with the matter.

“National Competition Authorities can however decide that there are no grounds for action under Article 101 TFEU where on the basis of the information in their possession they come to the conclusion that the conditions for prohibition are not met.”

Malta’s finance minister, Clyde Caruana, had previously said that particular industries are dominated by long-standing players, with certain Maltese possibly oligopolies colluding on prices.

Caruana said it is a typical characteristic for a small island which hosts certain industry players whose dominance also stretches generations back, having obtained their importing power early last century.

In reaction to the Commission's reply, Alex Agius Saliba insists that his own request concerned whether the local market is operating competitively enough, rather than collusive practices.

“When you have more competition, you’ll have lower prices. The investigation I requested was on ‘de-facto’ monopolies.”

Agius Saliba said the dominance of a few payers in the market makes it difficult for smaller importers to compete.

“I asked the Commission to investigate de-facto monopolies, which isn’t collusion, and the operation of the European single market in Malta, considering the realities of a small country with big players.”

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