Small business lobby calls out Labour MEP for demanding Brussels probe into Maltese food importers

Malta’s Chamber of Small Business has taken issue with a call from Labour MEP Alex Agius Saliba for the European Commission to investigate what he called “de facto monopolies” in distribution, which he accused of contributing to higher food inflation.

“I have been following with increasing concern how the high and sustained level of inflation is eroding the standard of living for the most vulnerable members of society and is causing upheaval in our communities,” Agius Saliba said.

But the Chamber of SMEs said it was disappointed at Agius Saliba’s choice of target. “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.

“It is unfortunately not the first time that the SME Chamber has noted a negative attitude towards businesses by the MEP. Out of all the currently sitting MEPs he is the only one who has never sought to engage in any contact, consult or involve the SME Chamber in any way as is his duty to do in order to represent all of Malta’s society.”

The lobby group even accused Agius Saliba of partisanship in the European Parliament by labelling MEPs who “out Malta’s local affairs in Brussels as traitors”.

“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. We remind him that Maltese businesses make a big chunk of the votes and his attack has bought him no favours. The SME Chamber believes that this attitude of cheap tactics should not be trusted.”

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 has however explained how three country-specific factors are leading to an even higher inflation rate in Malta

“First, Malta suffers from the natural disadvantage of being a small island on the periphery of Europe and hence cannot enjoy the benefits of economies of scale. Second, Malta is not entitled to preferential treatment or assistance which could allow it to mitigate its susceptibility to external shocks in the global market,” he said.

“Third, its size and geographical limitations have led to the formation of de-facto monopolies where a handful of importers dominate entire markets. 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. This in turn enables them to respond aggressively to any parallel importation from smaller traders who attempt to lower prices.”

It is about this third aspect that Agius Saliba has requested the President of the European Commission, Ursula von der Leyen, to take action. “Excessive pricing is an antitrust violation in terms of the EU competition law. EU legislation specifically prohibits the abuse of a dominant market position to impose unfair prices on consumers.”

“If we truly believe that the Single Market should work for the benefit of our consumers, we must ensure that the Market works correctly in every member state. During this particular juncture, we must fight even further so that the Single Market addresses the priorities of our citizens and the worries of our consumers,” he said.

“I have asked the European Commission to urgently investigate the potential abuse of dominant market positions by a few importers, particularly in the food industry. I will do whatever it takes to ensure that socially disadvantaged consumers do not suffer disproportionately from high inflation.”