(Adds statements by Liquigas, GRTU)

Liquigas has been issued with a cease and desist order by the Office of Fair Competition after it was found to be infringing the Competition Act.

In a statement, Liquigas said it noted the decision but it was reserving all its rights by law.

The GRTU has instructed distributors to do their utmost to get the situation back to normal as soon as possible

Liquigas was refusing to supply distributors arguing that those selling its product should not sell products of other companies.

A strike directive was issued by the GRTU to gas distributors, which argued that the latter were licenced retailers who paid for their licence and it would be unlawful and monopolistic if they were restricted to selling just one company's product.

As a result, they refused to sell gas cylinders door to door or from fixed plants, including the plant at Qajjenza.

The office issued Liquigas with a ‘cease and desist order’, to Liquigas to:

* Cease and desist immediately from imposing any exclusive purchasing/distribution obligation, and

* With immediate effect and unconditionally to supply distributors with gas cylinders to avoid further consumer harm.

GRTU’s complaint was lodged with the office by Parliamentary Secretary for Consumer Protection Chris Said who was asked to intervene by the GRTU.

In the complaint, Liquigas was accused of abusing of its dominant position in that it was refusing to supply LPG and gas (heating) cylinders unless the distributors respected a provision in the exclusive distribution agreement, entered into between the parties that distributors shall refrain from purchasing, distributing and selling cylinders or any other products not belonging to Enemalta Corporation, which preceded Liquigas.

GRTU director general Vince Farrugia insisted that such action constituted a violation of the Competition Act.

Richard Camilleri, on behalf of Liquigas, sent the office a written rebuttal to GRTU’s allegations and Liquigas insisted it was not going to supply distributors, who will be catering for the carriage of cylinders belonging to any other company.

The OFC considered a number of issues including the dominance by Liquigas and that distributors were, in this case, buyers and acting as a service to supply consumers with gas cylinders.

It concluded that considering the consumer harm that would continue, as a result of the actions taken by Liquigas to refrain from supplying distributors with gas cylinders, the company was infringing the Competition Act.

LIQUIGAS STATEMENT

Liquigas said it noted the decision but it was reserving all its rights by law. It said that throughout this issue, it has always been consistent and clear:

a) Liquigas is against the monopolistic position held by the Distributors who want to carry on with their territorial exclusivity by insisting that they should retain a monopoly on the distribution of all sources of supply. This prevents competition at the distribution level.

b) The distributors have a collective dominant position in the Maltese market. This monopoly does not serve the real interest of the consumer.

c) Liquigas wants to significantly upgrade the quality of the LPG cylinders distribution service, so as to develop a better service for its customers.

d) In the case of door to door supply of LPG cylinders by means of trucks, the consumer must have the choice to differentiate products even at the level of the distributor’s truck.

Liquigas said it had the right to protect its commercial interests and it wasonly reasonable that it should be able to determine how its products are distributed.

GRTU STATEMENT

The GRTU said that the position had now been cleared following three days of meetings and representations with the government.

It said that all parties agreed to come to an agreement by the end of January for distribution to continue being improved to the satisfaction of consumers and commercial users.

The association instructed distributors to do their utmost to get the situation back to normal as soon as possible.

It thanked Resources Minister George Pullicino and Dr Said for their contribution in the issue and said that it had shown, yet again, that when it had to defend groups of self-employed or owners of small businesses, it took the necessary steps for its members’ rights to be safeguarded.