Tuesday, May 28, 2024
BusinessAuthority sues firms for price-gouging

Authority sues firms for price-gouging

The Trade Practices and Consumer Protection Authority has sued 15 local steel bar producers and importers for jacking up prices following devaluation of the birr in October. 

The Authority sued producers and importers in separate files for violating Article 7 of the Trade Competition and Consumer Protection Proclamation.

In this regard, eight local steel producers, in the file “Walia Steel Industry PLC et al,” are sued for colluding in order to fix prices in the wake of the 15 percent devaluation of the birr by the National Bank of Ethiopia (NBE).

Of the aforementioned eight steel producers, three manufacture reinforcement bars and the rest produce steel tubes and pipes.

These producers, according to the suit, fixed selling prices on the same day the devaluation was announced.

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The same proclamation prohibits such price-fixing arrangements.

“An agreement between or concerted practice by business persons or a decision by association of business persons in a horizontal relationship shall be prohibited if it involves, directly or indirectly, fixing a purchase or selling price or any other trading condition, collusive tendering or dividing markets by allocating customers, suppliers territories or specific types of goods or services,” reads part of the proclamation.

The Authority also sued the remaining seven importers under the same provision.

“We have tried our best to pressure these producers and importers to stop fixing and increasing prices of steel tubes and pipes, reinforcement bars juts few days after the devaluation,” communications director with the Authority told The Reporter.

However, they turned a deaf ear to our reminder, and carried on with the illegal practice, and that is why we decided to bring the case to a court of law, he said.

It is to be recalled that according to assessments made by the Authority just one week after the devaluation, the price of reinforcement bars, both locally-made and imported, has shown up to a 200-percent hike.

The rise was more significant on imported ones.

The Authority in the suit also asked the Administrative Tribunal to pass a cease-and-desist order against the defendants.

Moreover, it called for the revocation of defendants’ business licenses until they adjusted prices to an acceptable level.

In addition, the Authority demanded that a ten percent penalty fee be assessed on defendants’ annual sales.

The case is now adjourned to January 26, 2018.




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