The Competition Authority of Kenya(CAK) has fined nine steel companies, Kes 338.9 million, for illegally increasing the prices of steel products.
They include Corrugated Steel Limited, Kes 86.97 million; Tononoka Rolling Mills Limited, Kes 62.72 million; Devki Steel Mills Limited, Kes 46.3 million; and Doshi and Hardware Limited, Kes 41.6 million.
Others are Jumbo Steels Mill Limited, Kes 33.14 million; Accurate Steel Mills Limited, Kes 26.83 million; Nail and Steel Products Limited, Kes 22.82 million; Brollo Kenya Limited, Kes 9.4 million; and Blue Nile Wire Products Limited, Kes 9.16 million.
The Authority argues that the nine companies engaged in cartel conduct whose effect was to increase the cost of homes and infrastructure by raising steel product prices.
As a result, the costs of bars, pipes, beams, and sheets, which account for over 20% of the construction cost, increased.
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CAK acting Director General Adano Wario said the penalties are proportionate to the offence, specifically for consumers complaining of the country's high cost of steel products.
Further, he emphasized that the penalties are meant to restore competition in the sector and deter companies from deploying anti-competitive practices as a business strategy.
“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,” he said.
According to CAK, it began looking into the issue in August 2020.
It conducted a covert statewide field screening, revealing that manufacturers had worked together to set price and output caps.
Following an examination, the Authority discovered that steel companies had made decisions to, among other things, limit imports of 0.9mm coils and plates, coordinate the publishing of pricelists using ex-factory prices, keep an eye on rivals' stock levels, and track sales volume.
“The steel sector intervention is a progression of the authority’s efforts yo facilitate, among others, affordable housing to Kenyans.”
