Issue link: https://maltatoday.uberflip.com/i/1516098
13 NEWS maltatoday | SUNDAY • 18 FEBRUARY 2024 'Importers coerce stores to refuse cheaper goods' Importers' reaction A spokesperson for AMSM told this newspaper the Agius Sali- ba petition was based "on a false premise". "The European Commission made it clear that the investiga- tion requested isn't within their competence… Agius Saliba is effectively claiming the Maltese authorities are unable to protect the European single market, and that the Commission should in- vestigate on the grounds that two importers allegedly control the market. "He implies AMSM controls over 50% of the fast-moving con- sumer goods (FMCG) market. The reality is that AMSM has less than 11% share of the FMCG sector in Malta. So, the Petitions Committee accepted the petition based on a wrong premise," the AMSM spokesperson said. AMSM added that of over 100 food distributors in Malta, no one single Maltese company in this sector is in a dominant posi- tion. "Competition law prohibits market distortions occasioned by a dominant firm… AMSM categorically rejects any accusa- tion of profiteering. It has been in business for over 100 years and has built the confidence of numerous suppliers to handle their products in Malta, based on efficiency, investment, and integrity." An FBS spokesper- son refuted the allegation of profiteering. "We do not dictate market prices. We have been working round the clock to mit- igate this situation by trying to negotiate the best prices with our international suppliers, lo- cal service providers as well as trying to optimise its operating costs while prioritising quality." FBS said it had never sought to take advantage of its position as one of Malta's main foodstuffs im- porters, saying they invited Agius Saliba to engage with the com- pany directly and verify the facts. "We always seek to offer consum- ers the best possible prices against an extremely challenging global economic climate characterised by significant price increases." The spokesperson also denied the MEP's 'bullying' claim on retailers who source products from parallel traders. "While we represent a number of brands, we have no control over the market. In fact, many of our brands are available locally through other importers and retailers, contra- ry to Alex Agius Salib's misin- formed remarks." FBS said it does not place stick- ers on products to distinguish them from parallel imports, ex- cept for an English translation of ingredients when this is legally necessary. FBS attributed the rise in food prices to the perfect storm of the war, shipping disruptions in the Red Sea, severe droughts and the post-COVID supply chain recov- ery, as well as skill shortages and inflated house prices. "Costs have gone up across the board and will continue to do so with new EU environmental taxes and ESC requirements… while we all have a role to play for a more sustainable future, this does come at a cost. In order to remain a viable business, we are forced to make the necessary ad- justments." Petitions Committee want EC probe MEPs representing the other parties in the Petitions Committee backed Agius Saliba's request to force the European Commission into launching an investigation, after refusing to wrest responsi- bility for the matter away from the national competition regulator. Danish MEP Margrete Auken (Greens) said major players could easily conceal their actions be- hind the peculiarities of small markets, and that the EC should not rest solely on the investiga- tions of national regulators. Bulgarian MEP Andrey Novak- ov said Agius Saliba's allegations were worrying and said the EPP supported requests to have the Commission resolve such issues. Another EPP member, German MEP Peter Jahr, said it was clear that Maltese consumers had no recourse to other markets while Germans could easily source cheaper products from nearby border countries. "Importers on the mainland cannot conduct themselves in the same way as they conduct themselves in Mal- ta," Jahr said. Spanish MEP Esther Sanz Selva (The Left) said the Commission could not refuse to act on a mar- ket with dominant players, saying this was a situation that led to ex- cessive inflation for citizens. Agius Saliba thanked MEPs for backing his call and said it was clear that the single European market was not functioning as expected in Malta. "It is not ac- ceptable that the Commission does not take an interest in this matter… it is vital that the EC is proactive in such particular circumstance in the smallest member state. Malta is an island whose food importation and dis- tribution sector is uniquely Mal- tese and consumers have no oth- er choice." What is an Article 102 investigation? Article 102 of the Treaty on the Functioning of the European Union (TFEU) prohibits abusive conduct by companies that have a dominant position on a particular market. The Commission's first step in an Article 102 investigation is to assess whether the undertaking concerned is dominant on any given market or not. Before assessing dominance, the Commission defines the product mar- ket and the geographic market. If a company has a market share of less than 40%, it is unlikely to be dominant. What is an abuse of dominance? Holding a dominant position on any given market is not in itself illegal. However, a dominant company has a special responsibility to ensure that its conduct does not distort competition. Examples of behaviour that may amount to an abuse include: requiring buyers to purchase all units of a particular product only from the dom- inant company – exclusive purchasing; setting prices at a loss-making level – predation or predatory pricing; refusing to supply input indis- pensable for competition in an ancillary market, and charging excessive prices. Investigations The Commission's investigative powers empowers it to enter the prem- ises of companies; examine the records related to the business; take copies of those records; seal the business premises and records; ask members of staff or company representatives questions relating to the subject-matter and purpose of the inspection and record the answers. This article forms part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. These articles reflect only the authors' views. The action was co-financed by the European Union in the frame of the European Parliament's grant programme in the field of communication. The European Parliament was not involved in its preparation and is, in no case, responsible for or bound by the information or opinions expressed in the context of this action. In accordance with applicable law, the authors, interviewed people, publishers or programme broadcasters are solely responsible. The European Parliament can also not be held liable for direct or indirect damage that may result from the implementation of the action.