Nine steel businesses have been fined Sh338 million by the Competition Authority of Kenya (CAK) over alleged market distortion and price fixing.
According to the competition watchdog, the nine companies have been penalized for increasing the cost of steel products.
The companies include; Corrugated Steel Ltd (Sh86.9 million), Tononoka Rolling Mills Ltd (Sh62.7 million), Devki Steel Mills Ltd (Sh46.3 million), Doshi and Hardware Ltd (Sh41.6 million), Jumbo Steel Mills (Sh33.1 million) and Accurate Steel Mills Ltd (Sh26.8 million).
Others are; Nail and Steel Products Ltd (Sh22.8 million), Brollo Kenya (Sh9.4 million) and Blue Nile Wire Products Ltd (Sh9.16 million).
According to the watchdog, the above listed companies directly caused developers to incur higher costs when building homes.
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The agency explained that after many complaints from developers, investigations into the accusation of price fixing started in 2020. It also conducted a number of raids at particular businesses to see if the claims were true.
The corporations collaborated, according to CAK, in order to increase their profit margins. For instance, it is said that the nine companies decided to forgo importing raw materials in order to stabilize pricing and product stipulations.
“Cartels are conceived, executed, and enforced by businesses to serve their commercial interests and to the economic harm of consumers. In this matter, the steel firms illegally colluded on prices, margins, and output strategies,” CAK director general Adano Wario said.
“This penalty is the highest-ever imposed by the Authority, and it should send a clear message that cartel conduct is illegal under the Competition Act. In a liberalized market like ours, the forces of supply and demand should signal prices, free from manipulative business practices.”
Before announcing its final verdict and levying the fines, CAK provided the corporations with multiple opportunities to present their case.
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“CAK interviewed the companies and their legal representatives and issued a notice of proposed decision to the parties in May 2022. By the end of August 2022, the parties had made oral and written submissions,” he continued.
“The hearings were in line with the tenets of fair administrative action. Upon reviewing the evidence and rebuttals, the Authority determined that the companies breached the Competition Act.”
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