Gonzi to clamp down on cartels

One of the many reasons why the European Movement (Malta) urged the Maltese people to embrace EU membership was that it would merge Malta within the EU internal market. This would be a number of adjustment costs, but it would also lead to a number of benefits.

Among the benefits we singled out increased competition, lower prices for many consumer goods, greater choice of goods, free movement of capital, free movement of services and the free movement of persons.

The free movement of persons has been slightly chipped by the airport tax. The benefits of the free movement of goods may have been seriously compromised by cartels.

The Maltese competition authority needs to be properly armed to deal with this threat. It is fairly easy in a small country like Malta for collusion to take place. Importers need not compete. They only need to agree on what prices to charge the consumer.

The representatives of the business community had better help out in this matter. They gain nothing from being tarnished by such behaviour.

We think there has been collusion. A visit to any of our supermarkets shows that prices have not been sticky - they have been stretching. Basic consumer goods, pharmaceuticals, cosmetics, etc., all have been rising up the price league faster than they have been doing anywhere else in the EU.

The Government must set up an agency to advise people on how to import goods and distribute them in the market. Consumer organisations must be strengthened.

They should begin to publish information when prices rise, which products are affected and which establishments are most keen at fleecing unsuspecting consumers.

Many outlets in Malta seem to be viable only because of cartel behaviour. As long as profits remain lucrative, because of such misbehaviour, entrepreneurial energies will continue to be deflected from exporting to the EU and the rest of the Mediterranean.

The war against cartels and collusion is not needed only to prepare ourselves for the introduction of the euro in 2008. It is needed for the sake of changing a counter-entrepreneurial culture masquerading as one. It is needed because it affects the freedom of ordinary citizens.