The competition watchdog is investigating allegations of price fixing by maize traders and millers, which are blamed for the recent surge in maize flour prices.
Competition Authority of Kenya (CAK) director-general Kariuki Wang’ombe says the agency is seeking “hard” evidence that would lead to legal action against those found culpable. The investigations began three weeks ago.
CAK is working jointly with the Ministry of Agriculture to find out dynamics surrounding the pricing of maize flour, which has shot past the Sh100 per 2kg packet mark.
“Manipulation of prices is a criminal offence and we have to find indisputable evidence before taking legal action against millers,” said Mr Wang’ombe.
In December last year, the ministry of agriculture directed CAK to commence investigations into claims of price fixing among top millers as flour prices continued to defy falling energy and maize prices.
The ministry had also instructed Agriculture Food and Fisheries Authority (AFFA) to study the actual cost of milling and recommend an ideal price.
This comes even as Consumer Federation of Kenya (Cofek) plans to lodge complaints with CAK over the three major millers whom it accuses of holding Kenyans at ransom by manipulating prices of flour.
The lobby’s secretary-general Stephen Mutoro said there are three established millers in the country who are playing a cartel-like role in controlling flour prices.
“We cannot accept this anti-competitive behaviour and monopolistic tendencies that has seen a few millers control the flour industry,” said Mr Mutoro.
Acting Agriculture secretary Adan Mohamed has, however, defended the three millers who are accused of controlling the market, saying that they only command a small fraction of the milling industry.
“The three leading millers that have been accused of manipulating the market actually control 30 percent of flour industry in the country, so it is not right to say that they are monopolising the market,” said Mr Mohammed.
The Cereal Growers Association (CGA) of Kenya has also challenged the manner in which millers act in hiking the prices of flour at the expense of poor households.
“When the price of maize goes up slightly, millers act promptly by raising the price of flour, but they take long before reducing the cost of the commodity when the price of the raw material drops,” said CGA chief executive Anthony Kioko.
Mr Kioko said the high price of maize in the market does not benefit farmers but rather the traders, who acquire the produce from the growers at bottom rock prices.