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CTC to investigate surge of counterfeit toothpaste in Zimbabwe
18 Oct 2024 at 09:03hrs | Views
The Competition and Tariff Commission (CTC) has announced an investigation into reports of counterfeit toothpaste products flooding the Zimbabwean market, citing potential serious health risks to consumers. This move comes amid growing concerns about the importation of unregulated toothpaste, which could endanger the health of Zimbabweans.
In an official notice, the CTC revealed that domestic industry players have presented evidence indicating that the significant rise in toothpaste imports has caused substantial harm to local production. The commission noted that the increase in imports, both in absolute and relative terms, has been particularly pronounced from 2020 to 2023, leading to a worrying decline in the performance of the domestic industry.
The CTC highlighted deteriorating indicators such as production levels, capacity utilization, sales, market share, and, notably, profitability. As a result, the commission has determined that all conditions necessary for initiating a safeguard investigation are met.
"The Competition and Tariff Commission has received and accepted an application for an investigation regarding remedial action in the form of a safeguard measure against the increased importation of toothpaste into Zimbabwe," the notice stated. The application was submitted by Merken Investments (Pvt) Limited, the sole producer of toothpaste in the country.
According to the CTC, the evidence presented by Merken Investments shows a clear causal link between the surge in toothpaste imports and the serious injury inflicted on the local industry. The commission has characterized the situation as a result of unforeseen developments, including the effects of obligations under the General Agreement on Tariffs and Trade (GATT) 1994.
The CTC intends to conduct the investigation in line with the Competition Act and the World Trade Organization Agreement on Safeguards. Stakeholders are encouraged to provide information during this investigation, with strict confidentiality guidelines in place to protect sensitive data.
Toothpaste falls under the harmonized system customs tariff code 3306.10.00, classified as dentifrices, which currently attracts a duty of 40%. The CTC emphasized that the locally produced toothpaste is technically and commercially substitutable with imported products.
Notably, the primary countries exporting toothpaste to Zimbabwe include India, China, and South Africa. The CTC has indicated that these nations have significantly increased their production capacity following COVID-19, leading to surpluses that are now being absorbed by global markets, including Zimbabwe.
As the investigation unfolds, the CTC aims to ensure consumer safety and protect the interests of the domestic industry against unfair competition posed by counterfeit and unregulated products.
In an official notice, the CTC revealed that domestic industry players have presented evidence indicating that the significant rise in toothpaste imports has caused substantial harm to local production. The commission noted that the increase in imports, both in absolute and relative terms, has been particularly pronounced from 2020 to 2023, leading to a worrying decline in the performance of the domestic industry.
The CTC highlighted deteriorating indicators such as production levels, capacity utilization, sales, market share, and, notably, profitability. As a result, the commission has determined that all conditions necessary for initiating a safeguard investigation are met.
"The Competition and Tariff Commission has received and accepted an application for an investigation regarding remedial action in the form of a safeguard measure against the increased importation of toothpaste into Zimbabwe," the notice stated. The application was submitted by Merken Investments (Pvt) Limited, the sole producer of toothpaste in the country.
According to the CTC, the evidence presented by Merken Investments shows a clear causal link between the surge in toothpaste imports and the serious injury inflicted on the local industry. The commission has characterized the situation as a result of unforeseen developments, including the effects of obligations under the General Agreement on Tariffs and Trade (GATT) 1994.
The CTC intends to conduct the investigation in line with the Competition Act and the World Trade Organization Agreement on Safeguards. Stakeholders are encouraged to provide information during this investigation, with strict confidentiality guidelines in place to protect sensitive data.
Toothpaste falls under the harmonized system customs tariff code 3306.10.00, classified as dentifrices, which currently attracts a duty of 40%. The CTC emphasized that the locally produced toothpaste is technically and commercially substitutable with imported products.
Notably, the primary countries exporting toothpaste to Zimbabwe include India, China, and South Africa. The CTC has indicated that these nations have significantly increased their production capacity following COVID-19, leading to surpluses that are now being absorbed by global markets, including Zimbabwe.
As the investigation unfolds, the CTC aims to ensure consumer safety and protect the interests of the domestic industry against unfair competition posed by counterfeit and unregulated products.
Source - newsday
