ZAMBIA: COMPETITION AND CONSUMER PROTECTION COMMISSION LEVIES MAXIMUM PENALTIES FOR ANTI-COMPETITIVE TRADE PRACTICES IN THE CEMENT INDUSTRY
Zambia’s Competition and Consumer Protection Commission (Commission) has fined Lafarge Zambia plc (Lafarge) and Mpande Limestone Ltd (Mpande) 10% of their annual turnovers in 2019 and 2020, following findings that these companies, together with Dangote Cement Zambia Ltd (Dangote), fixed prices and divided markets in the local cement industry.
The finding comes after a year-long investigation conducted by the Commission into perceived anti-competitive practices in the cement market. The Commission’s investigation revealed that Lafarge, Mpande and Dangote colluded on price, divided markets and exchanged commercially sensitive information on future prices and rebates in 2019 and 2020. The Commission found that there was a ‘meeting of minds’ between the companies, to pursue an anti-competitive objective.
Dangote had applied for, and was granted full leniency, for having cooperated with the Commission during its investigation. A fourth cement company, Zambezi Portland Cement Ltd, was found by the Commission not to have been party to the practice.
In addition to any administrative penalty levied, the Commission may, in terms of the Competition and Consumer Protection Act, 2010 (Act), give an enterprise such directions, as the Commission considers appropriate to ensure that the enterprise ceases to be a party to the restrictive agreement.
In this case, and in addition to the 10% penalties levied in each of 2019 and 2020, the Commission directed Lafarge, Mpande and Dangote to ‘revert to pre-cartel prices ranging between USD 4.50 – USD 5 for a period of one year from the date of receipt of the Board Decision…’, and that each company should submit monthly average ex-works prices and any pricing adjustments to the Commission for review. The Commission also ordered each company to implement competition law compliance programmes, and to give undertakings to the Commission that their employees would not engage in anti-competitive practices.
The Commission’s decision in this matter, to fine the cement companies the maximum possible penalty in terms of the Act, follows closely on the heels of the Commission’s decision earlier this month to fine suppliers of fish fingerlings 9% - 10% of their annual turnovers for colluding on price (see our earlier newsflash here). True to its word, the Commission remains steadfast in its commitment to eliminate anti-competitive practices and to also prosecute contravening companies to the full extent of the law.