Illovo Sugar Malawi says some retailers are able to sell sugar at lower prices because they take advantage of promotional prices on offer from the company to sell their sugar at lower prices.
This, however, contradicts what some traders have told The Daily Times that Illovo favours larger wholesalers who buy up to 3,000 tonnes of sugar from the company, saying such wholesalers buy sugar at lower prices than smaller traders.
“We are disadvantaged. The big traders are able to sell their sugar at lower prices because they buy at lower prices. And we already raised this issue with Illovo,” alleged one small scale wholesaler at Karonga Trading Centre.
However, I l lovo Sugar spokesperson, Ireen Phalula, said in an interview that there is no trader who enjoys preferential treatment from the company, saying normal and discount prices are uniform and across the board.
“The difference is that some of the traders pass on promotional prices to consumers while others don’t,” said Phalula.
She said sugar business is survival of the fittest and that it is traders with best business strategies that win.
“During promotions, there is undercutting of prices at wholesale and retail level,” she said.
“Our main objective for offering such promotional discounts is that they should be passed on to the end users rather than being pocketed by traders. But this is not always the case as some traders don’t reduce their prices,” said Phalula.
She said sugar business is a volume based trade where the more volumes one sells, the more profits one makes.
“It is possible that the business strategy of some traders is to quickly sell their stock at reasonable prices, make lower margins and order again,” said Phalula.