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Three manufacturing firms have been penalised by the Competition and Consumer Protection Commission (CCPC) for engaging in a price fixing cartel of roofing sheets and accessories.
Longlihua Company Limited, Herocean Enterprises Limited and Building Dreams Limited are the three firms that have been penalised.
Penalising these three manufactures was one of the deliberations made by the Board of Commissioners of CCPC at their 63rd and 2nd Special Board of Commissioners’ Meetings for Adjudication held on August 11 and August 18, 2023 in Lusaka.
Brian Lingela, CCPC Executive Director, said in a statement issued on Thursday that the Board of Commissioners penalised the three manufacturing companies’ 8.5 percent each of their annual turnover for the year 2020.
Lingela said this was for engaging in a price fixing cartel contrary to Section 9 of the Competition and Consumer Protection Act, No. 24 of 2010.
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He said the Board established that the three roofing manufacturers had been communicating their prices, particularly increasing prices of roofing sheets and accessories, as well as consulting on how much certain types or profiles of various certain roofing sheets had increased.
“The Board further found that agreeing to fix the price of roofing sheets and roofing accessories eliminated competition among the three manufacturers and resulted in the setting of high prices for the roofing sheets and roofing sheet accessories with no incentive for innovation and producing high quality goods,” Lingela said.
He said the board was of the view that competitors had different cost structures and it was, therefore, unreasonable to agree to set similar price increase margins at pre-determined intervals even when production costs were different.
In addition, according to Lingela, the Board held that consumers were unfairly subjected to high prices of roofing sheets and accessories, lower quality and had their choices reduced due to this cartel conduct.
“Facts of the matter are that from 2020 to 2021, the firms were engaged in price information sharing including coordinating on simultaneous increase of prices of roofing sheets and accessories, as well as consulting on how much particular types or profiles of various roofing sheets had increased.
“The communication was done through a messaging app called WeChat which showed that in certain instances, Herocean Enterprises would increase the prices of their products when there was a price exchange between Long Lihua and Building Dreams and Herocean Enterprises (Dragon) to the detriment of consumers,” he said.
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