The Post Zambia, September 03, 2014
SUGAR producers in Zambia are taking advantage of consumers to overprice their commodity, says the Competition and Consumer Protection Commission.
And the Consumer Unit Trust Society (CUTS) International Zambia says the government’s goal of combating vitamin A deficiency in the country through sugar fortification will not be achieved if sugar prices remain too high.
Speaking at a discussion held in Lusaka yesterday on sugar fortification and the controversy surrounding pricing, the Competition and Consumer Protection Commission (CCPC) said producers were taking advantage of consumers to overprice their commodity due to lack of competition.
“From our perspective as CCPC, competition is the reason sugar prices are high in Zambia and particularly so because market power is concentrated in one player which is Zambia Sugar,” Emmanuel Chokwe, an economist and researcher at CCPC said.
“The players are taking advantage of the lack of competition to make a consumer pay far much more than they should.”
He said several institutions have in the past attested to the fact that the players in the sugar industry were taking advantage of consumers by pricing high their commodity.
“The Ministry of Commerce conducted a study in 2012 and the findings were the same to say sugar prices are high. If you also look at the 2010 report by Overseas Development Institute (ODI), Britain’s independent think-tank, the findings are the same. So is the Thomson Kalinda and Brian Chisanga report of 2014. Now the question is why should Zambians pay through their nose for sugar when they are blessed with a productive climate which ensures a cheap production of sugar? I do not see the point,” Chokwe said.
He said Zambian sugar was far much expensive in the region despite the country being among the top efficient producers in the world.
Chokwe said the excessive pricing of sugar was also contributing to high Vitamin A deficiencies in the country as the poor could not afford the fortified sugar.
He said that probably time had come for the country to look at ways of encouraging sugar imports to boost competition in the sector.
“If you allow imports, prices of sugar are likely to go down,” he said.
Meanwhile, Zambia Sugar Plc head of corporate strategy and communication, Doreen Kabunda, said people alleging that the price of sugar in Zambia was too high must look at the real reason why the price was high instead of trying to use “non-factual” studies to try and make allegations on Zambia Sugar.
Kabunda, who revealed that the study by the African Competition Forum (ACF) overstated profit margins by sugar producers, denied allegations that Zambia Sugar was a supplier of pre-mix material used for fortification.
“Zambia Sugar has never been a supplier of these products and we have never said the price of sugar was high because of fortification. That is not our position,” she said.
“If people are alleging that the price is too high in this country, they must look at the real reason why the price of sugar is high, not to try and use a certain study to try and make all the allegations, label Zambia Sugar as a monopoly out of a study,” she said.
Earlier, CUTS national coordinator Simon Ng’ona said the government needed to review the policy governing the sugar industry to ensure that new players were encouraged to enter the sector.
He said if sugar prices remained high, efforts by the government to reduce Vitamin A deficiency through sugar fortification would be defeated.
Estimates by the National Food Nutrition Commission of Zambia (NFNC) shows that Vitamin A deficiency in Zambia reduced from about 66 per cent to about 54 per cent of the population.
“This deficiency level is still high,” NFNC acting executive director Musonda Mofa said.
“We need more concerted efforts.”
William Chilufya, country coordinator CSO-SUN Alliance, said Zambia was losing about US$186 million annually to vitamin and mineral deficiencies.
He said scaling-up core micronutrient interventions would cost less than US$7 million per year