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Alba Iulia
Wednesday, March 31, 2021

CCPC fines Cement firms for Anti-Competitive Trade Practices and orders adjustments of prices

Economy CCPC fines Cement firms for Anti-Competitive Trade Practices and orders adjustments of...

The Board of Commissioners of the Competition and Consumer Protection Commission (CCPC) has fined Lafarge Zambia Plc and Mpande Limestone Limited 10% of their annual turnovers for the year 2019 and another 10% of their 2020 annual turnovers for price fixing and division of markets.

Dangote Cement Zambia Limited was granted full leniency for having cooperated with the Commission during investigations.

Further, the Board has ordered Lafarge Zambia Plc, Dangote Cement Zambia Limited and Mpande Limestone Limited to revert to the 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 pursuant to Section 59 (3) (b) of the Act.

Additionally, that Lafarge Zambia Plc, Dangote Cement Zambia Limited, Mpande Limestone Limited submit monthly average ex-works prices and any price adjustments be indexed to the exchange rate and be submitted to the Commission for review pursuant to Section 58 (1) of the Act.

The Board has also ordered the three Cement Companies to develop and implement compliance programmes in their respective firms within 90 days of receiving the Board Directive.

This is according to a statement issued by CCPC Spokesperson Namukolo Kasumpa.

“Furthermore, the Board has directed Lafarge Zambia PLC, Dangote Cement Zambia Limited and Mpande Limestone to make undertakings within 90 days of receiving the directive that their respective employees should not engage in any anti-competitive behaviour and that the enterprises should not facilitate and/or participate in any anti-competitive conduct including the exchange of information.”

The Board of Commissioners also dropped charges against Zambezi Portland Cement Limited after it was established that they were not part of the cement cartel.

The decision to fine Lafarge Zambia Plc and Mpande Limestone Limited was made during the 49th Board of Commissioners Meeting for the Adjudication of Cases held in Lusaka on 30th March 2021.

This was after an exhaustive investigation by the Commission initiated in January 2020, following the Commission’s observations of a sustained increment of cement prices from an average of K55 to K100 per 50Kg bag between July 2019 and January 2020.

The continuous price increment of cement by the parties led the Commission to suspect that there was possible collusion and an agreement to fix the prices of cement.

The investigation which lasted for over one (1) year revealed that the parties shared price adjustment proposals seeking approval for price changes before the implementation date and in some cases before they were approved by their respective management.

The exchange of commercially sensitive information on future prices and rebates demonstrated that there was a ‘meeting of minds’ among the Respondents to pursue an agreed objective.

The investigation established that company representatives from Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc held discussions and meetings which resulted in the development of a pricing philosophy to stop cement price reductions.

The investigations also established that the Cement Companies had agreed on a flat rebate of ZMW3 sometime in December 2019.

The Board of Commissioners determined that the sharing or exchange of commercially sensitive information relating to future prices and rebates by Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc amounted to an agreement.

The Board of Commissioners further determined that this agreement was anti-competitive as it was used to fix the price of cement and share markets contrary to Section 9(1) (a) and (b) of the Act respectively.

The Board noted that infrastructure development is the backbone of social- economic development and one of the Government’s key priority areas in the Seventh National Development Plan.

The construction industry is important for Zambia’s economic growth, infrastructural development and employment generation and the cement industry plays a vital part of this infrastructure development.

The fixing of cement prices by the three Companies and setting of trade conditions therefore undermined a competitive market and was detrimental to consumers.

“While the Board of Commissioners takes cognisance of the role Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc, play in the economy in general and their contribution to employment creation, their conduct had the serious effect of undermining infrastructure development both private and public especially with Government’s continued thrust on infrastructure development projects from roads, schools, clinics and development of district centres among others.”

Based on these facts, the Board decided to fine Lafarge Zambia Plc and Mpande Limestone Limited the maximum fine of 10% of their annual turnovers for the two (2) years of 2019 and 2020 for price fixing and market sharing.

The Board noted that Dangote Cement Zambia Limited was granted leniency as they were the only Leniency applicant and assisted with investigations.

“The Board would also like to take this opportunity to warn businesses that engage in Anti-competitive Business Practises to desist from such conduct. The Commission remains steadfast in its commitment to eliminate any anti- competitive trade practices, which impact negatively on Zambia’s quest to promote a competitive business environment and ensure that ordinary consumers are not exploited.”

9 COMMENTS

  1. I SUGGEST THEY PULL OUT AND GO WHERE THEIR CONTRIBUTION WUD BE MORE APPRECAITED
    AND PERHAPS GOVERNMENT CAN TAKE OVER ONE FOR THEIR CADRES AND PUT THEIR MONEY WHERE THERE MOUTH IS

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  2. Government take over? Are you mad? Then the prices will triple and the difference will go in the pocket of all those cadres!

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  3. GOVERNMENT CANT RUN THIS COUNTRY WITHOUT OUT SIDE ASSISTANCE AND NOW THEY TRYING TO CONTROL MULTI NATIONALS FOR WHAT THEY SAY IS COLLUSION DUMB REALLY DUMB
    WHEN MY COMPETITORS UPS THEIR PRICES I AND OTHERS NORMALLY FOLLOW AS THERE IS ALWAYS A JUSTIFYABLE REASON
    THIS IS NOT COLLUSION !!!!!!!!!!!!

  4. Now expect a shortage of cement as these companies will produce limited stock which will be snapped up by traders who will still sell the same at K130 per pocket since they do not fall under the CCPC umbrella and are free to retail at whatever price in a free market economy.

  5. I know it is good thing but this decision is very timely I think. I am impressed with the speed at which the investigation was conducted by CCPC. Maybe they can teach other agencies how to do investigations of this kind.

  6. ..,This is why us the Citizens of Zambia MUST take full responsibility for the development of our country, our failure is the failure of our nation. We have a lot of empowerment programmes which we as Zambians have failed to support with both hands. The head of state cannot develop the country alone, he or she can only do their part of facilitating.

  7. The pricing of goods in our country is something that needs felicitous observation at all corner of the Zambian spectrum. It’s like ppl fix prices whenever they feel like without the intervention of the governmental institution, and in most cases, this ppl is like whenever they hear the price of crude oil, diesel etc is gone up, they also increase the price of the commodities without government intervention and sometimes the prices just go up immediately without any warning given to the member of the public, Most families nowadays sleep thinking tomato or a bag of mealie meal will go up when they wake up. I mean, it’s a nightmare. at least let ppl know in weeks or months in advance that a certain commodity price will go up with proper justification so that ppl will have time to budget…

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