The Competition and Consumer Protection Commission (CCPC) tribunal says the matter in which Lafarge Zambia Plc, Mpande Limestone Limited (commonly known as Sinoma Cement) and Dangote Cement Zambia Limited appealed the CCPC board’s decision of the three companies reverting to pre-cartel prices is still before the tribunal.
Head of Tribunal Secretariat Kalumba Chulu said the matter is still being heard and judgement waited upon but could not confirm when the case would be concluded. This is despite the fact that this directive was issued five months ago.
When contacted for a comment, CCPC Senior Public Relations Officer Namukolo Kasumpa said she could not comment on the matter as it was before the tribunal. CCPC management issued the directive but CCPC appeals tribunal has dragged and is unable to share timelines of when it would reach its decision, a situation that has led to frustrations among expectant members of the public.
On 5 March 2021, the commission confirmed that they had concluded their investigations into cement price hikes after closely observing the operations of the market players in the cement market, which had led to the commission instituting investigations into a possible cartel conduct in January 2020.
This was after a year of investigations, which had seen the price jump to levels, which have resulted in most construction projects across the country stalling due to cost escalations.
On March 31, 2021 the board of commissioners of CCPC fined Lafarge Zambia Plc and Mpande Limestone Limited 10% of their annual turnovers for 2019 and another 10% of their annual turnovers for their the two companies 10% of their annual turnovers for the year 2019 and another 10% of their 2020 annual turnovers for price fixing and division of markets.
The commission’s board further ordered the two companies to revert to pre-cartel prices ranging between USD 4.50-USD 5 (K83 per 50kg bag at current exchange rate of K16.5 per US dollar) for a period of one year from the date of receipt of the board decision pursuant to section 59 (3) (b) of the Act
Dangote Cement Zambia Limited was granted full leniency for having cooperated with the commission during investigations.
A month later, the top three cement companies who were ordered to cut cement prices and revert to what was described as pre-cartel prices ranging between US$4.5 to US$5 per 50kg all defied the order.
A check done by the Zambian Business Times – ZBT with all the three cement producers who had been ordered to cut prices revealed that none of them had reduced prices. One of the cement companies ordered to cut prices – Lafarge Zambia confirmed with ZBT that they had mounted a legal challenge against the decision.
Lafarge Zambia also confirmed that they had appealed against the Competition and Consumer Protection Commission (CCPC)’s decision alleging that the company contravened the Competition and Consumer Protection Act.
The company denied participation in an alleged price-fixing and market allocation collusion in the cement market and looked forward to presenting its case.
Responding to ZBT, Lafarge Corporate Affairs and Communications Manager Sarah Banda said in its notice of appeal filed before the Competition and Consumer Protection Tribunal, the company emphasized that it cooperated with the CCPC throughout its investigation into the cement industry.
Banda said Lafarge provided numerous detailed submissions, documents and testimonies to demonstrate the lawful nature of its operations in the market. The prices had therefore not been reduced pending the tribunal process.
A further check with the other cement firm that was also fined and ordered to cut cement prices, a source who asked for their details to be withheld from Mpande Limestone Limited ( popularly known as Sinoma cement) confirmed that the company had not reduced its cement prices.
Speaking exclusively to ZBT, the source said according to the information circulating within the company, Sinoma did not intend to revert to pre-cartel prices.
“Before any price adjustment or increment they need to inform us internally, so we haven’t been informed, it means we are not reducing. We need adequate time to communicate to our clients to say okay, cement prices are going up or they are being reduced”, the source told ZBT.
The most shocking thing is that even the cement company that was not fined but ordered to cut prices, Dangote Cement, also refused to badge. Dangote Cement also confirmed that the company had maintained its cement prices.
Cement prices were expected to come down at the beginning of May 2021 after CCPC confirmed that they had given the cement companies one month probation to implement the order. It seems instead that the cement firms opted to use the one month to put together a legal defense that would effectively derail the order.
Court processes in Zambia take time to settle, some legal experts have estimated an average of three years needed to litigate and have a judgment issued in complex cases such as this one.
