Ethiopia: iron manufacturers overcome price-related costs



The companies were accused of reportedly rising prices between 4.7 to 140 units

Prosecutor of the Trade and Consumer Protection Authority has lost another case against six corrugated iron manufacturers accused of conspiracy of prize drifts.

The prosecutor accused the six manufacturers of breaking competition law by setting prices for corrugated iron products in increases of 4.7 to 140 percent higher, starting in October last year. In the allegations filed on 23 January 2018, the public prosecutor penalized 10% of the annual turnover and suspension of his marketing authorizations until the prices of corrugated iron fell to the level preceding the alleged price agreements.

The price agreements with respect to the companies were submitted one month after the devaluation of 15% of the Birr in October 2017, although the public prosecutor did not mention this fact in the accusations. In November last year, government researchers launched a series of probes in the activities of various manufacturers, importers and retailers. After the investigation importers of medicines and veterinary medicines, steel manufacturers and the food processor Fafa Foods were charged. These companies were accused of price manipulation and disruptions.

The six steel-producing suspects – Ethiopian Steel Profiling & Building, Kombolcha Steel Products Industry, Ethiopian Steel, Alem Steel, Bazeto Industry & Trade and Werksew Legesse Eshet Metal Engineering submitted their statements of defense on 8 February 2018.

The undertakings, represented by lawyers of the defense, denied any involvement in anti-competitive acts, concerted practices and conspiracy of price agreements in their statements of defense. The companies also argued that the accusations that the prosecutor had brought against them were not supported in the pleadings or in the form of supporting documents. They also argued that the public prosecutor could not demonstrate when the alleged illegal acts took place and who caused the price breakdown.

After assessing the defense submitted by the defendants, the tribunal proceeded to oral disputes that took place on 25 April 2018. The court heard the witnesses both by the public prosecutor and defendants on 17 May 2018 and then again on 6 June 2018.

After a discussion of the case in the past eight months, the tribunal, under the chairmanship of Kidane Tsegaye, Mekdes Mekurya and Biruh Gemeda, closed the case after issuing a verdict in favor of the defendants. In their ruling, the judges stated that the prosecution documentary evidence and witnesses did not submit allegations of horizontal price fixing and conspiracy against the suspects.

"We will appeal to the court of appeal," Melake Tsehay, the prosecutor who handled the case told Fortune.

A month ago, the tribunal had closed a similar case against eight distributors and sellers of pharmaceutical products by the prosecutors of the authority. In that judgment, the judges came to the same conclusion and ruled in favor of the companies by rejecting the claims of the public prosecutor. They stated that the presented evidence and the witnesses did not support the accusations. Dissatisfied with the ruling, the public prosecutor filed an appeal with the court of appeal, where the case is still pending.


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Ethiopia: iron manufacturers overcome price-related costs



The companies were accused of reportedly rising prices between 4.7 to 140 units

Prosecutor of the Trade and Consumer Protection Authority has lost another case against six corrugated iron manufacturers accused of conspiracy of prize drifts.

The prosecutor accused the six manufacturers of breaking competition law by setting prices for corrugated iron products in increases of 4.7 to 140 percent higher, starting in October last year. In the allegations filed on 23 January 2018, the public prosecutor penalized 10% of the annual turnover and suspension of his marketing authorizations until the prices of corrugated iron fell to the level preceding the alleged price agreements.

The price agreements with respect to the companies were submitted one month after the devaluation of 15% of the Birr in October 2017, although the public prosecutor did not mention this fact in the accusations. In November last year, government researchers launched a series of probes in the activities of various manufacturers, importers and retailers. After the investigation importers of medicines and veterinary medicines, steel manufacturers and the food processor Fafa Foods were charged. These companies were accused of price manipulation and disruptions.

The six steel-producing suspects – Ethiopian Steel Profiling & Building, Kombolcha Steel Products Industry, Ethiopian Steel, Alem Steel, Bazeto Industry & Trade and Werksew Legesse Eshet Metal Engineering submitted their statements of defense on 8 February 2018.

The undertakings, represented by lawyers of the defense, denied any involvement in anti-competitive acts, concerted practices and conspiracy of price agreements in their statements of defense. The companies also argued that the accusations that the prosecutor had brought against them were not supported in the pleadings or in the form of supporting documents. They also argued that the public prosecutor could not demonstrate when the alleged illegal acts took place and who caused the price breakdown.

After assessing the defense submitted by the defendants, the tribunal proceeded to oral disputes that took place on 25 April 2018. The court heard the witnesses both by the public prosecutor and defendants on 17 May 2018 and then again on 6 June 2018.

After a discussion of the case in the past eight months, the tribunal, under the chairmanship of Kidane Tsegaye, Mekdes Mekurya and Biruh Gemeda, closed the case after issuing a verdict in favor of the defendants. In their ruling, the judges stated that the prosecution documentary evidence and witnesses did not submit allegations of horizontal price fixing and conspiracy against the suspects.

"We will appeal to the court of appeal," Melake Tsehay, the prosecutor who handled the case told Fortune.

A month ago, the tribunal had closed a similar case against eight distributors and sellers of pharmaceutical products by the prosecutors of the authority. In that judgment, the judges came to the same conclusion and ruled in favor of the companies by rejecting the claims of the public prosecutor. They stated that the presented evidence and the witnesses did not support the accusations. Dissatisfied with the ruling, the public prosecutor filed an appeal with the court of appeal, where the case is still pending.


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