Mozambique: Competition authority accuses sugar companies of forming cartel

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Mozambique: Competition authority accuses sugar companies of forming cartel

1:21 CAT | 22 Nov 2025

File photo: Notícias

The Mozambican Competition Regulatory Authority (ARC) has condemned four sugar companies for forming a cartel in the sector. All of the companies are partners in the same purchasing and sales company Distribuidora Nacional de Açúcar (DNA) , and ARC ordered the DNA dissolved for anti-competitive practices, referring the case to the Attorney General’s Office (PGR).

According to ARC decision 5/2025 of 13 November, the investigation has now culminated in the imposition of five fines on the companies concerned, totalling 69.5 million meticais (€940,000).

The investigation leading to this conviction began in 2022, following complaints received, and scrutinised practices such as “prohibited horizontal agreements” and “participation in anti-competitive practices” through a misdemeanour proceeding under Mozambique’s Competition Law.

The case concerns Distribuidora Nacional de Açúcar (DNA), established in 2002 by four partners: Tongaat Açucareira de Moçambique (Mafambisse, in Sofala), Tongaat Hulett Açucareira de Xinavane (Xinavane, in Maputo), Companhia de Sena (Sena, in Sofala), and Maragra Açúcar (Maragra, in Maputo), each with a 25% share.

DNA’s “purpose is to buy and sell sugar and any other products derived from or related to sugar on its behalf, including the import and export of sugar and the storage of sugar stocks,” according to the ARC.

However, it pointed out that the four companies “are in a horizontal relationship and should therefore be competitors in the sugar production business, which is why the shareholders’ agreement” establishing DNA was deemed “anti-competitive”.

“Their intention to restrict competition between them in the sugar production and marketing market is unequivocal, eliminating uncertainties about their future behaviour by creating a company that functions as a cartel, which has been given broad powers to determine the commercial policy of the companies that constitute it, including determining the selling price of their products,” reads the decision.

The decision explained that Mafambisse, as well as Xinavane – sold this year to the South African group Vision Sugar – produce raw sugar and “sell exclusively to DNA”, and are also “signatories to the DNA social pact and the shareholder agreements that define the obligation to sell all their sugar to that company, which has the prerogative to set the purchase price of the product”, as are Sena and Maragra, which produce sugar cane and raw sugar.

Throughout its conclusions and information on the investigation, ARC noted that “the lack of direct competition between factories and in the distribution of sugar does not promote innovation and efficiency” and that, “as all factories operate under the same marketing model”, based on “price standardisation”, they “do not need to differentiate” their products or seek “more efficient forms of production and distribution”.

“The lack of competitiveness can lead to stagnation in the sector and hinder improvements in the quality of the sugar produced,” according to the document, which added that the “DNA’s exclusivity agreements,” which oblige the four factories to sell exclusively through the distributor, “create barriers to the entry of new operators” into the market and “limit competition.”

DNA acts as a cartel, a mechanism for coordination between competitors, ensuring that all factories sell sugar at standardised prices, subverting the law of supply and demand. This model eliminates the possibility of effective competition between factories in the relevant market and constitutes a serious violation of the Competition Law. The lack of price variation between factories prevents consumers from benefiting from discounts or more competitive commercial strategies,” accuses the ARC.

The authority ordered the sugar mills to “definitively cease anti-competitive practices,” namely by dissolving and liquidating the DNA by 31 December 2027, in addition to referring the case to the Attorney General’s Office “for information and possible adoption of complementary measures within the scope of its constitutional and legal powers.”

Source: Lusa