Nine steel manufacturers penalized by Competition Authority of Kenya

The Competition Authority of Kenya(CAK) has penalized nine companies for hiking the prices of steel products and affecting competition in the market.
In a statement on Wednesday, 23 August, the authority sanctioned the list of cartels in the steel sector and fined them pursuant to an investigation that was conducted in August 2020.
“The Authority has pursuant to an investigation, penalized 9 steel manufacturers a total of KSh 338.84million. The companies engaged in cartel conduct whose effect was to increase the cost of construction of homes and infrastructure by artificially inflating the prices of steel products,” the authority stated.
According to the authority, the cartels had been inflating prices of steel products including bars, pipes, beams, and sheets, accounting for over 20% of the total cost of constructing a house.
The companies penalized for adjusting prices are; Nail and Steel Products Limited, Orono Kenya Limited, Blue Nile Wire Products Limited, Tononoka Rolling Mills Limited, Devki Steel Mills, Doshi & Hardware Limited, Corrugated Steel Limited, Jumbo Steel Mills and Accurate Steel Mills Limited.
The mentioned firms excluding Accurate Steel Mills have additionally been penalized for colluding to limit the import of certain steel materials.
Their action resulted in a shortage of the products hence the price increase that is illegal under the Competition Act.
Adano Wario, the Authority’s Acting Director-General, said that the penalties are equivalent to the manufacturers’ action effect on consumers that led to the high cost of steel products.
“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 and margins as well as output strategies,” said Wario.
He said that the penalty on the companies would serve as an example to stop others from using illegal competition strategies.
“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. Agreements between competitors seek to defeat this fundamental facet of a free economy.” he added.
The authority has further engaged 5 other steel companies in settlement negotiations to ensure effective competition returns.
In 2021, the Authority also penalized 4 paint manufacturers for fixing prices among other charges.
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