GRTU hits back at Liquigas ‘cartel’ claims

The Chamber of SMEs (GRTU) has rebutted claims by liquid petroleum gas importers Liquigas that the association was backing a "cartel" of 23 gas distributors, warning the Italian company with legal action.

"Liquigas Malta has no limits to arrogance. It entered a market where an efficient system of distribution existed already, a system that was and still is based entirely on consumer benefit and that has been in place for over 40 years," the GRTU said, claiming Liquigas was intent on removing the gas distributors so that it claims a monopoly on the market.

Malta's gas cylinder market is dominated by Liquigas and its sole competitor is Easygas - both companies sell their gas cylinders to various distributors who in in turn retail the cylinders to consumers.

A 1992 agreement between the energy regulator and the gas distributors gives each distributor a territorial exclusivity to deliver cylinders in particular areas. The agreement now hangs in the balance in an appeal on the decision by the Consumer Affairs Authority (MCCAA).

"Territorial exclusivity remains in place... gas distributors will continue to make sure that the service to end-consumers is provided in the best way possible, despite the fact that every day Liquigas tries to create new stumbling blocks to the livelihood of these gas distributors and to the service that the Maltese consumer enjoys," the GRTU said.

The GRTU said that Liquigas was offered a liberalized gas market by the government "on a silver platter" just a few months after the 2008 election. "Liquigas is aware that if it succeeds in eliminating the gas distributors, then it would be free to operate a monopoly."

Liquigas's parent company Liquigas SpA was fined €17.1 million back in March 2010 for colluding in a 10-year cartel on the island of Sardinia, with two other companies, between 1995 and 2005.

"In those years the price of a 12 kg cylinder in Sardinia rose to €32 per cylinder for a home delivery. This is an undeniable fact confirmed by the EU's highest court and which Liquigas cannot deny. GRTU has always questioned who shouldered the responsibility for the due diligence exercise, prior to giving the green light for a foreign investor to come into the market and arbitrarily try to dictate how consumers are to be treated, and at what price," the GRTU said.