Chronicle Editor
The Common Market for East and Southern Africa’s Competition Commission has launched an investigation into allegations of price fixing by tobacco auction floors and merchants in the region.The CCC is a regional body which seeks to create a “one stop shop” dealing with competition issues in the Common Market.
Well placed sources told BH24 that the CCC as well as the country’s Competition and Tariffs Commission were investigating a well-organised multi-national cartel which is operating from many countries within the region.
“The idea is that these merchants are working with tobacco auction floors to bid lower prices for self-funded crop while higher prices are offered for the contracted crop.
This is forcing farmers to go under contract farming with the merchants involved,” said the source.
The current tobacco selling season has been characterised by low prices, which some stakeholders believe are a result of a deliberate ploy by the said cartels whose aim is to completely destroy self-funding growing of the golden leaf. The allegations are that these tobacco merchants are conniving not to bid high prices so that when they export the golden leaf, they get more money than they would have bought it for.
“There were discussions held with CCC last week and it was discovered that it is the same merchants buying tobacco in most tobacco growing countries in Comesa and offering higher prices for the contracted crop and less for self-funded tobacco,” said the source.
He said this was pushing out competition in the tobacco industry as only those merchants in the cartels benefited. He said once the investigation is complete, the outcome and following actions are likely to bring sanity to the tobacco industry which has become the anchor of Zimbabwe’s agriculture sector.
Zimbabwe has three auction floors licensed to buy tobacco and at least 15 registered contracting companies have funded 70 000 hectares, representing a 72 percent of the total planted area for the 2013 /14 season, more than 68 percent of last year. – BH24.
Online Reporter
dyton mupawaenda