It is reported that Lafarge may be punished by the Competition Authority of Kenya (CAK) for price monopoly. CAK has accused Lafarge of alleged price-fixing in Kenya's cement market because of its large stakes in Kenya's East African Portland Cement Company (EAPCC) and Bamburi Cement Company. Lafarge owns 41.7% of EAPCC and 58.9% of Bamburi Cement.
"Cross-holdings such as Lafarge's are widely regarded as anticompetitive," CAK said.
CAK is expected to announce whether Lafarge has "unlawfully concentrated economic power" in June 2014. CAK will force Lafarge to sell its stake in either EAPCC or Bamburi Cement if it is found to have a monopoly on prices. Kenya's Competition Act (No.12 of 2010) also stipulates that if Lafarge is found to have conducted price monopoly in Kenya, the head of Lafarge may be fined up to $115,000 or sentenced to five years in prison.
Lafarge was accused of price fixing in Kenya few months ago after the Kenyan government accused it of attempting to destabilize EAPCC to protect its interests in Bamburi Cement. It is reported that the Kenyan government and the National Social Security Fund (NSSF) have a 52.3% majority stake in EAPCC.
Lafarge retorts that its minority stake in EAPCC does not control it. Lafarge also said that EAPCC is a real competitor to Bamburi Cement. In addition, if Lafarge destroys the stable development of EAPCC, Lafarge will also face failure.
In addition, Didier Tresarrieu, the representative of Lafarge on the board of directors of EAPCC, also said recently: "No cement company has monopolized the cement industry in Kenya, so there is no possibility of Lafarge abusing its dominant position."
However, Kariuki Wang 'ombe, director of CAK, said the current holding structure is not conducive to fair competition. The Wang 'ombe. Added: "a price monopoly could result, as cross-control would make one competitor's strategy clear to the other.". But it does not mean that there is really a price monopoly in Kenya's cement market.
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