Tea farmers seek to join KTDA case

Tea farmers from Kericho seek to join as a party in the case where KTDA wants court to bar the Competition Authority of Kenya from releasing a report on tea industry.

Kenya: The case filed by Kenya Tea Development Agency (KTDA) against the competition watchdog over a report on cartels and price manipulation has attracted 1,000 farmers now seeking to be joined as a party.

The small-scale farmers through their lawyer Peter Wanyama claim that the agency is trying to stifle a grand case before a Kericho Court in which they are seeking to recover Sh93 billion from KTDA allegedly pinched from their earnings in the past 15 years.

The report dubbed Benchmarking or Marketing Inquiry for the Tea Sector in Kenya is at the centre of the war between KTDA, tea farmers and the Competition Authority of Kenya (CAK), considering it had alluded to cartels and price manipulation at the tea auction leading to losses.

“The Tea Industry Status Report May 2014, accuses various industry players, chief among them KTDA and its subsidiaries, of manipulating the price of the highest tea grade PF1, which is mainly produced by small-scale farmers,’’ the court heard.

The farmers alleged that their tea is sold at lower prices than those of inferior grades at the weekly auctions. “The report also blamed direct sales outside auction venues on some big marketers which create a huge price difference while giving the impression that there is excess tea in the market,’’ the farmers alleged in their court papers.

In the case before High Court judge Weldon Korir, Mr Wayama told the court that the intention by the marketing agency to have the report quashed was only meant to deny farmers key evidence in their petition in Kericho.

KTDA told the court that it should not entertain the farmers in the case.

KTDA in its case wants the High Court to quash the findings of the report that highlighted its domination in the market, thus killing competition. The weekly auction is the main channel for Kenyan tea into the international markets. The damning report found that it was controlled by a few buyers.

The marketing agency claimed that its officials were duped into giving information and later was locked out from giving its side of the story. “Some KTDA officers were approached with questionnaires which were filled out in answer to some specific questions and there was an assurance that the views communicated would be treated with utmost confidentiality,” said KTDA’s Group Secretary John Omanga. However, farmers told the court that their hopes in the Kericho case were pegged on the authenticity of the report. “The determination of this suit will have a great impact on the determination of the applicant’s case in Kericho,” Wanyama said.

Interested parties

Kenya’s tea marketing agency has denied accusations of colluding with a cartel to manipulate prices in a secretive practice that has allegedly cost small-scale farmers billions of shillings. In the case before Kericho High Court, the agency had denied the allegations, saying it was bound by the law and thus could not shift prices.

KTDA argued that the current predicament of the small-scale farmers was as a result of loose trading and pricing as well as stunted growth in the local tea market. “The domestic market has never improved, hence over-reliance on exports, which is affected by external factors beyond KTDA’s control. Falling (international) prices have led to a corresponding decrease in the price of Kenyan tea,” the agency argued in documents before the Kericho High Court.

KTDA also denied dirty games in the post-auction purchases, saying poor sales results were as a result of late bids from overseas clients. At the same time CAK, before Milimani Court, is not opposed to having the farmers join in as interested parties. The case before Milimani Court will be heard on Monday next week, April 20.