CAK fines firms for collusion in Rerec tender bid

Collusion between manufacturers and distributors on pricing remains a concern.

The Competition Authority of Kenya (CAK) has fined three companies a total of Sh552,135 for colluding to fix prices in a tender to supply electricity poles to the government. 

CAK said the three companies – Trade Winds International Ltd, Masherbrum Contractors Ltd and Sums Decorators Ltd – were found guilty following investigations into the lucrative tender award made by the Rural Electrification and Renewable Energy Corporation (Rerec). 

“The Competition Authority has entered into a settlement agreement with Trade Winds International after the authority initiated investigations on alleged collusive tendering irregularities by participating firms in the tenders for Rural Electrification and Renewable Energy Corporation with regard to procurement of concrete and treated wooden electricity poles,” CAK said in a statement.

“The company paid a financial settlement amount of Sh204,896 and gave a written undertaking to desist from any anti-competitive conduct and put in place a competition compliance programme to sensitive its leadership and key staff on competition law.” 

Sums Decorators and Masherbrum Contractors were fined Sh143,427 and Sh203,812 respectively and the companies forced to make a written commitment to desist from the practice.

At the same time, the CAK fined Capwell Industries, makers of popular rice brands  Ranee, Pearl, and CIL Sh600,000 for false and misleading representation in the labeling of the products.

Collusion between manufacturers and distributors on pricing remains a concern and has been blamed for the rise of cartels in various consumer segments.