Mario Vella Petroni has no idea what became of the Malta Furniture Manufacturers’ Assocation he once presided over. He used to be a vociferous defender of the sector, which in its heyday employed 3,000-4,000 people directly – as well as all the other suppliers.
He is still vociferous now – but the target of his energy is no longer the EU and the removal of levies but the importation of furniture from Italy – which he suspects is being sold without VAT.
He had started his company, Fitwell, 40 years ago when he was just 18. He was studying accounting at the time but in his third year, decided he had had enough and hired a garage and two helpers.
“I went to the bank to get a Lm300 loan but they only gave me Lm150 because the furniture trade was not considered to be lucrative,” he smiled, stopping to chat on his mobile in fluent Italian to one of his long-standing suppliers.
“Ha! When I had the factory at Ricasoli, I employed around 70 people. Those were the days when people wanted solid, sculptured furniture that would last their lifetime,” he said.
Like all his peers, he had to reinvent his business once the levies were removed, taking on brands and retailing, closing down the factory side completely.
“We could never have been competitive in this sector. How could we compete with the economies of scale that come from having a market of millions? Malta never had elephants; we only ever had pygmy elephants. You have to accept your limitations,” he shrugged.
He tried to collaborate with his competitors and did some major contracts internationally as part of a consortium, but he is quite cynical about the experience.
“You need to really be hands on to do business in Libya,” he said.
“I think that the Maltese tend to be too suspicious of each other for consortiums to work...”
But he is furious about the current situation.
“I used to be very enthusiastic about the EU as I assumed that it would create a level playing field. The reality is that merchandise is being brought in by truck from Italy and I believe that VAT is not being paid on a lot of it. And do they pay eco-tax?
“Every truck coming into Malta should have documentation! Once, when I was driving in Italy with eight kitchen doors, I was stopped and held until I had all the paperwork... That is what should happen here if the authorities want a level playing field,” he said, unable to hide his bitterness.
He claimed – as many others have done before him – that Maltese go over to Sicily to see furniture in showrooms there which is then delivered to them here.
“The furniture is not made in Sicily. It is made in the north of Italy and I buy furniture from there so I know what the prices are – and believe me, I have a very good relationship with my suppliers, so I get a very good price. So how can it be sold for less than my prices? The only way would be if they were not paying VAT on it.”
“I used to laugh at what then Prime Minister Alfred Sant used to warn us about. But now I understand what he meant... I am not afraid of competition. But what happened to the level playing field?”