Lafarge to appeal against CCPC’s K99m fine

Lafarge Zambia says the company will launch an appeal against the Competition and Consumer Protection Commission’s decision to slap it with a fine for alleged price discrimination.

On Tuesday, CCPC fined Lafarge Cement Zambia Plc K99,235,400 for application of abusive loyalty discount schemes, price discrimination and excessive pricing.

“This was after an exhaustive investigation by the Competition and Consumer Protection Commission initiated in August 2013, following observed persistent increases in the price of cement, which found that; Lafarge Cement had engaged in the application of loyalty discounts which had lock-in effects and, facilitated discrimination among its customers in the market whom it had segmented based on trading volumes; Lafarge’s pricing discriminated the domestic market against the export market and further applied discriminatory pricing for the Lusaka segment of the Zambia market. Lafarge Plc abused it’s dominant position and had excessively priced its cement on the domestic market,” stated CCPC Board of Commissioners Chairperson Kelvin Bwalya Fube.

“The investigation which lasted for four years revealed that Lafarge Plc manufactures, markets and distributes Portland cement and had enjoyed market shares of 48 per cent to 86.4 per cent in Zambia during the 2010-2012 investigative period. This gave it a dominant position in the market, as investigations also revealed that cement imports only accounted for 4 per cent to 8 per cent of the market hence offering no effective competition. Specifically, the investigation revealed from 2010, Lafarge Plc started running loyalty programmes which categorised its customers into the tiers based on volumes. The customer loyalty Programme covered Lusaka and Ndola with Ndola receiving 3.5 per cent, 5 per cent and 8per cent for tier 1, tier 2 and tier 3 respectively while Lusaka customers in similar Tiers received 0 per cent, 3.5per cent and 5per cent respectively applicable on condition of a full month’s purchase or continued purchase from the time a customer starts buying from Lafarge Plc.”

But responding to a press query yesterday, Lafarge Stakeholder Relations Officer Gift Danga stated that his institution was denying any wrongdoing.

“LafargeHolcim/Lafarge Zambia has taken note of the decision by the Competition and Consumer Protection Commission (CCPC). The company is disappointed with this outcome and denies any wrongdoing. LafargeHolcim/Lafarge Zambia is of the firm belief that the company has acted and continues to act in compliance with competition laws. The company will continue to defend itself and launch an appeal against this decision,” stated Danga.

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