LAFARGE FINED K99 MILLION

Wed, 20 Dec 2017 12:05:23 +0000

By Bennie Mundando

THE Competition and Consumer Protection Commission (CCPC) has fined Lafarge cement over K99 million for application of abusive loyalty discounts, price discrimination, and excessive pricing. 

Chairperson for the board of commissioners Kelvin Fube Bwalya said the commission further directed the company to present proposals within three months on how it will ensure that it complied with the Competition and Consumer Act.

Mr. Fube said after an exhaustive investigation by the commission which was initiated in August 2013, it was discovered that  Lafarge cement had engaged in the application of loyalty discounts which had lock-in effects and facilitated discrimination among its customers in the market who it had segmented based on trading volumes.

He said Lafarge’s pricing discriminated the domestic market against the export market and further applied discriminatory pricing for the Lusaka segment of the Zambian market.

He further said the company abused its dominant position and had excessively priced its cement on the domestic market.

He said the four-year investigation revealed that Lafarge manufactures, markets and distributes Portland cement and had enjoyed market shares of around 48 to 86.4 percent in Zambia during the 20210 to 2012 investigative period.

He further said investigations revealed that cement imports only accounted for around 4 to 8 percent of the market hence offering no effective competition and that from 2010, Lafarge started running loyalty programmes which categorised its customers into tiers based on volumes.

“The board also directed Lafarge to present proposals to the commission within three months on how it will ensure that it complies with the provisions of the Competition and Consumer Act,” Mr. Fube said.

Lafarge becomes the second business giant to face the wrath of CCPC in less than two months after the commission fined Zambia Sugar PLC over K76 million mid-last month for price discrimination and unfair pricing.

CCPC stated that after carrying out investigations from 2008 to 2012, it had been revealed that both industrial sugar consumers and household sugar consumers were being exploited.

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