CAK probes animal feed companies for price fixing

The Competition Authority of Kenya (CAK) is probing suspected fixing of prices in the animal feeds sector. PHOTO | POOL

The Competition Authority of Kenya (CAK) is probing the suspected fixing of prices in the animal feed sector.

The inquiry seeks to establish among other things the prices, costs, quantities produced, supplied, and purchased.

The probe further seeks to establish market shares, concentration, ownership relationships, joint ventures, and marketing agreements for products and services.

Read: Animal feed prices stay high on maize imports nod delay

The CAK will also seek to establish barriers to entry and growth of smaller feed producers as well as flows of demand and supply.

“The key objective of the market inquiry is to assess the market interaction, market structures, market outcomes, and other factors that may be affecting competition in markets along the animal feed value chains and recommend interventions that will support sustainable growth and competitive markets for a robust animal feeds sector in Kenya,” CAK acting director-general Adano Roba noted.

The agency’s move to tame the animal feeds manufacturers is an escalation of the watchdog’s role after previously sanctioning players in the steel, retail, and cooking oil sectors.

Steel tycoons were, for instance, handed down Sh338.8 million in fines over what it termed as engaging in cartel-like behaviour.

Nine companies in the sector were accused of price fixing and restrictions on output resulting in a price spike for steel and related products.

They were Corrugated Steel, Tononoka Rolling Mills, Devki Steel Mills, Doshi & Hardware, Jumbo Steel Mills, Accurate Steel Mills, Nail and Steel Products, Brollo Kenya, and Blue Nile Wire Products.

The CAK’s scrutiny was likely set off at the start of Covid-19 when it issued a cautionary notice on illegal price increases and hoarding.

Read: Unga gets nod to form two animal feed joint ventures

Following the first reported Covid-19 case in March 2020, the competition watchdog observed that some manufacturers and retailers were planning collusion to increase prices.

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