The Director General of the Office for Competition is publishing a preliminary report in accordance with Article 11A(3) of the Competition Act regarding the results of a sector inquiry on the Supply of Infant Milk Formula in the Public Health Sector and the impact of that supply on the private retail market for infant formula and similar products.

Last year, the Director General of the Office for Competition within the Malta Competition and Consumer Affairs Authority had initiated a sector inquiry in the above-mentioned markets in terms of Article 11A(1) of the Competition Act to examine the conditions of competition in the above sector of the economy.

Article 11A(1) of the Competition Act provides that “where the trend of trade, the rigidity of prices or other circumstances suggest that competition may be restricted or distorted within the Maltese market, the Director General may conduct an inquiry into a particular sector of the economy or into a particular type of agreements across various sectors”.

In terms of Article 14 of the Malta Competition and Consumer Affairs Authority Act, the Office for Competition has the responsibility to study markets and recommend action where required and to provide advice to public authorities on the competition issues which may arise in the performance of their functions, and to provide advice on the competition constraints imposed either by legislation, policy or administrative practices.

For the reasons and from the results contained in the preliminary report of the sector inquiry, it is clear that the tendering process adopted by the Central Processing and Supplies Unit regarding the supply of infant milk formula in the public health sector is distorting and restricting competition in the private retail markets of the relevant sectors.

The Office for Competition is inviting interested third parties to submit their views and feedback on this inquiry by 31 May 2021 before publishing the final report.

Following the consultation period, should the Office hold that there are no conditions of effective competition in this sector of the economy, it will announce specific recommendations in its final report which it considers absolutely necessary, appropriate and in accordance with the principle of proportionality, to create conditions of effective competition.

The preliminary report is available here.