Competition agency says tea marketer’s court case premature

The competition watchdog has termed as premature the case filed by the Kenya Tea Development Agency (KTDA) over a draft report reviewing the status of the sector.

Last year, the Competition Authority of Kenya (CAK) appointed audit firm Deloitte to study the competitiveness of the tea sector value chain following a report by the Kenya Tea Board accusing major players of colluding to fix prices, hurting millions of farmers.

The report indicates prevalence of cartels and price manipulation at the tea auction that cut farmers’ earnings and accused KTDA of a near monopoly status, saying its ownership wards off possible competition.

The Competition Authority which is represented by the Attorney-General told Justice Weldon Korir that the said report was a draft yet to undergo validation.

“It is not yet an opportune time for them KTDA to seek orders stopping the adoption of the report and KTDA have failed to show the prejudice they are likely to suffer if the same is adopted,” the regulator said in court.

The regulator said that the report was done in accordance to the Constitution, adding that there were legal provisions under the competition authority Act through which KTDA could give their views on the report.

“The draft report is still under consideration by CAK and before a decision is made whether or not to adopt it, KTDA will be consulted,” the Attorney General said.

KTDA claims it was not given an opportunity to respond to many allegations made against it in the report and that the regulator tricked its officials into giving confidential information used to prepare a section of the report.

“If the orders of stay are not granted the regulator would be free to make findings against my client using the report which can attract legal action and fines of up to Sh10 million,” lawyer Anthony Maruti told the court.

READ: KTDA denies claims of price manipulation with tea brokers

KTDA says that the regulator did not follow the process of instituting an inquiry by failing to put up a gazette notice and notify the tea agency about the same in writing.

Tea farmers, through lawyer Peter Wanyama, had moved to court seeking to be enjoined in the case on grounds that they had a stake in the outcome of case.

“The application is premature and speculative. KTDA can also not say that they were not consulted when seven of their directors across the country are mentioned at various stages of the report,” Mr Wanyama told the court.

Mr Wanyama told Justice Weldon Kirui that the report is part of a case before the Kericho court where the agency is accused of price-fixing.

Kericho Governor Paul Chepkwony filed the Sh93 billion suit which accused KTDA of colluding with big market players to fix prices leading to small scale farmers losing out on billions

The Kericho case is based on another report by the Tea Directorate that accuses KTDA of controlling prices and buying from small holders at very low prices.

Justice Kirui will on Wednesday make a ruling on the temporary orders sought by the tea agency.