The Malta Chamber of Commerce, Enterprise and Industry this week expressed “serious concern” over recent declarations made by both the government and the Opposition about competition safeguards and the role of the state in business affairs.

On the one hand, the Chamber pointed out, the finance minister was reported to have stated that the government intended to create an agency to safeguard fair competition and ensure that there are no price abuses.

“In turn,” the Chamber observes, “the Leader of the Opposition stated that, (a) A price monitoring agency needs to be established that would be in a position to report and proceed against anti-competitive practices like cartels and price fixing, (b) a website should be created to publicise recommended retail prices of all food and medicine products sold in Malta and, (c) government imports products and services itself, which are sold to the public in different methods. He stated it was crucial to establish full transparency; eliminate inefficiencies and undue bureaucracy.”

Any proposal related to price monitoring agencies is unacceptable, the Chamber insisted, adding that it believes competition is the best form of ‘price control’ which no agency can ever seek to achieve.

“Of course, competition requires a regulatory framework which, in turn, necessitates a well resourced competition office,” the Chamber said.

“Within the realities of today’s market, where cut-throat competition emerges from every angle including the internet, it is inconceivable to suggest that local competing businesses can agree to fix prices. Besides, for several months, the Chamber has been insisting for effective market surveillance, to ensure that a truly competitive environment prevails as several bona fide businesses were facing illicit competition from traders that did not comply with fiscal, environmental and other regulations. It is of concern to note that politicians seem to be only interested in protecting the consumer even at the expense of risking tax revenue and jobs.”

The Chamber described the PL’s third proposal – in which the government would import products and services itself – as “ambiguous and subject to interpretation”, and has requested clarifications, which it said turned out to be unsatisfactory.

The Chamber adds, “One of the fundamental beliefs of the Chamber is that the government’s role is to legislate, regulate and re-distribute public funds – and not enter into direct competition with private enterprise. It also believes that public sector set-ups cannot match private sector efficiency levels.

As such, the Chamber noted that instances of state intervention in business have diminished over the past years, and that it expects the remaining cases to be resolved within a given time frame.”

Additionally, the Chamber observed, “It certainly does not expect any reversal of the set process with the importation and distribution of goods and services by the government.

“Undue encroachment in business by enterprises which are controlled or owned by the state is unacceptable. The practice is detrimental to the private sector, the consumer and the economy at large in both the short and longer term.

“Besides the curtailment of turnover and eroded market shares, it discourages private initiative and investment to the long-term detriment of wealth and employment opportunities in the country.”