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Business Reporters
THE Competition and Tariff Commission (CTC) is investigating Zimbabwe’s largest cooking oil processor, SurfaceWilmar over allegations of monopolistic tendencies over unfair business practices and preferential pricing. Among the issues raised by some wholesalers who have approached the CTC are SurfaceWilmar’s unfair payment terms to some customers, short supplies to some players and preferential pricing for a selected group of customers.

The wholesalers want SurfaceWilmar to be transparent regarding the terms and conditions it offers to its customers. They alleged, in communication to the CTC, that SurfaceWilmar is offering preferential pricing to wholesalers.

For instance, SurfaceWilmar preferred customers who are retailing a box 2-litre bottles of cooking oil at $31,40 per box while the aggrieved wholesalers are purchasing the same box at an ex-factory price of nearly $32, a price which renders them uncompetitive when they put in their mark up.

The wholesalers said efforts to engage SurfaceWilmar to iron out the issues have yielded nothing. SurfaceWilmar chief executive officer Mr Sylvester Mangani confirmed that the company is offering a different price mix to its various customers depending on a number of factors including volumes of purchase and payment terms among others. He denied that the company is offering preferential pricing to a selected group of customers.

“Prices of our products to our various customers differ from time to time and are determined at anytime within certain parameters dictated by volumes of purchases, promotional activities, payment terms, distribution method etc.

“This is normal for all businesses. As an entity engaged in a competitive business segment we have to manage this mix to ensure optimal performance for our business,” Mr Mangani.

He said SurfaceWilmar has not received any official communication from any customer and are unaware of any investigation by the CTC into the matter.

“As the largest producer and supplier of cooking oil, it is inconceivable that we would achieve the wide distribution of our product countrywide, even to the most remote areas, if we based our business on petty issues as raised.

“Our sales books are available for your perusal to ascertain that those allegations are baseless and malicious,” said Mr Mangani.

“Please note that SurfaceWilmar is not an Indian business but is partly-owned by Government through IDC and by SR Armando of Mauritius,” he said.

To compound the situation for the indigenous wholesalers, another processor, PureOil Industries, producers of ZimGold cooking oil have had a breakdown at their plant which has reduced supplies to the market.

“For your information, one of our key competitors (and key cooking oil supplier) has had major supply problems this season and the customers allied to them may be frantic to switch their business relationships with us at the last hour.

“This may be a challenge during this time of high demand as distribution of our product will be mainly through already established distribution channels to achieve the national coverage that we enjoy,” said Mr Mangani.

Industry and Commerce Minister Michael Bimha confirmed hearing of the allegations but said he was yet to meet the parties to the outcry.

Surface recently bought into another major cooking oil supplier, Olivine Industries. Upon completing the transaction, Surface is alleged to have immediately stopped supply to some wholesalers.

The Oil Processors Association of Zimbabwe recently lobbied heavily for the Government to restrict import permits for cooking oil meaning that wholesalers will have no alternative suppliers.

“For the record, the cooking oil industry has been praised by the Government as the sector that has risen to the challenge of investing and competitively localising production against the influx of imports. SurfaceWilmar is currently concluding the multi-million dollar expansion of its refining and bottling capacity to ensure that Zimbabwe does not have to import cooking oil again,” said Mr Mangani.