Coca-Cola ordered to stop setting price for distributors

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By GERALD ANDAE

Nairobi. Coca-Cola Beverages Africa (CCBA) will suspend a clause that allows it to set prices for distributors of its non-alcoholic drinks following a probe by the Comesa Competition Commission.
The probe found that stipulation of prices by CCBA, a subsidiary of the Atlanta based Coca-Cola Company, subjects consumers to high prices.
The move follows investigation, which found that “the stipulation of prices by a market leader was likely to lead to an inflation of prices of competing brands in the market”.

The Coca-Cola unit, following findings of the probe, the Comesa Competition Commission said has already undertaken to amend its agreements to remove clauses that stipulate the prices and profit margins for its products.

“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,” the commission said.
According to the Comesa Competition Commission, monitoring of the beverages sector will continue to ensure compliance in order to create a fair competition.

The commission is charged with the responsibility of checking against anti-competitive practices as well as overseeing mergers and acquisitions across Africa.
Last year the commission 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, a Kenyan businessman owns a 45 per cent stake in Bayer East Africa, which is a subsidiary of the Bayer Group.
The commission is also investigating The Confederation of African Football (CAF) over alleged anti-competitive behaviour.

Monitor.co.ug

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