COMESA agency suspends Coca-Cola from setting prices for distributors

Coca-Cola Beverages Africa Ltd (CCBA) will suspend it’s clause that allows it to set price for distributors of its non-alcoholic drinks following a probe by Comesa Competition Commission (CCC).

The competition Commission says stipulation of price by CCBA, a subsidiary of the Atlanta based Coca-Cola Company, has a tendency of subjecting consumers to higher prices.

The move follows investigation by the competition body against the beverage maker, which started in January last year.

“The stipulation of prices by a market leader was likely to lead to an inflation of prices of competing brands in the market where the incumbents set prices in a similar fashion as that of the market leader. The overall effect of this would be higher prices for consumers,” says CCC.

The Coca-Cola unit, says the COMESA body undertook to amend its agreements to remove clauses that stipulate the prices and profit margins for its products.

“Furthermore, the CCBA undertook to implement a compliance programme designed to ensure that its employees, management and directors do not engage in conduct that contravenes the regulations,” CCC notes.

Fair competition

The agency says it will continue to monitor the sector closely to ensure compliance in order to create a fair competition.

CCC is charged with the responsibility of checking against anti-competitive practices as well as overseeing mergers and acquisitions in the continent.

The commission last year cleared the acquisition of Monsanto Company by Bayer, paving the way for the acquisition.

Bayer and St Louis-based Monsanto are two of the world’s biggest agricultural companies and currently compete to sell farmers seed and crop protection products.

Chris Kirubi owns a 45 per cent stake in Bayer East Africa, which is a subsidiary of the Bayer Group.

CCC is also investigating The Confederation of African Football (CAF) over alleged anti-competitive behaviour.

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