Zambia: Competition Authority Conducts Dawn Raids in the Maize Milling Industry

zambia

ZNBC reported on 30 October 2015 that the Zambian Competition and Consumer Protection Commission (CCPC) conducted dawn raids on three milling companies, namely National Milling Corporation, Superior Milling Company and Simba Milling Company, as well as the Miller’s Association of Zambia.[1]

The Raid follows the CCPC’s investigation into the alleged fixing of maize and flour prices in contravention of the Competition and Consumer Protection Act, 24 of 2010 (Act).

Importantly, in terms of the Act, a person who engaged in price fixing (as well as other traditional types of cartel conduct such as market allocation and collusive tendering) may be subjected not only to a fine, but imprisonment to a maximum of five years. Furthermore, price fixing is prohibited per se, consequently there is no rule of reason or justification defence available to a respondent who has been found to have directly or indirectly fixed prices.[2]

The raids carried out in the milling industry are the first to be conducted by the CCPC since 2013, when raids were carried out in relation to the fertilizer industry.[3]

We have previously reported on African Antitrust that the South African competition authorities have, since mid 2014, carried out an unprecedented number of dawn raids on a variety of industries. Furthermore, that the flour and maize milling industry has also been under scrutiny by the South African authorities.

John Oxenham, a founding director of Pr1merio African advisors, notes that “it is evident that a number of African competition agencies have identified the food industry, especially in so far as it affects lower LSM groups as a priority sector.”

This has led to a number of competition agencies, as previously reported on AAT, to announce that they will be conducting market inquiries into the grocery retail sector. Included amongst these agencies are the competition authorities of South Africa, Botswana and COMESA, the latter which will conduct a market inquiry into the industry across all member states.

It remains to be seen whether the CCPC, who is empowered to conduct market inquiries in terms of the Act, will follow suit.

[1] http://www.znbc.co.zm/?p=24472 (accessed 03-11-2015).

[2] See section 9 of the Act.

[3] http://www.polity.org.za/article/competition-and-consumer-protection-commission-gears-up-to-fight-cartels-in-zambia-2013-07-23 (accessed 03-11-2015).

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