There has been an unreasonable and arbitrary increase in the price of consumer goods, especially protective and hygiene products such as face masks and latex gloves, anti-bacterial wipes and hand sanitizers on account of coronavirus (COVID-19) because these products are relevant and necessary in preventing infection or the spread of COVID-19.
With the increase in these consumer goods, the agency responsible for the competition and consumer protection in Nigeria, that is, the Federal Competition and Consumer Protection Commission (FCCPC) intervened by releasing a circular on the 28th of February, 2020 through its Chief Executive Officer, Mr. Babatunde Irukera. It was stated in the circular that unreasonable increase in the price of these consumer goods violates both moral and extant law, “Abusing citizens’ sensitivity, apprehension, anxiety, and vulnerability, especially during emergencies that could adversely affect national security is a violation of the law, specifically, Section 17 (s) of the Federal Competition and Consumer Protection Act (FCCPA) which prohibits obnoxious trade practices, or the unscrupulous exploitation of consumers”.
The circular further stated that any person who engages in the act of conspiracy, combination, agreement, or arrangement to unduly limit or manipulate supply, to unreasonably enhance price or otherwise restrain competition is liable for a criminal offense. Mr. Babatunde Irukera finally encouraged consumers to be vigilant, and report arbitrary prices in consumer goods and unreasonable trade practices to the Commission.
Also, on the 1st of March, 2020, FCCPC issued a press release emphasizing that practices which “abuse citizen’s sensitivity, apprehension, anxiety, and vulnerability, especially during emergencies” is a violation of the law. The press release was followed by the Commission prosecuting four supermarkets in Abuja for allegedly hiking the prices of protective and hygiene products.
In a press release issued on the 28th of March, 2020 FCCPC reported that a platform had been created which is dedicated to receiving information/complaints or intelligence about these arbitrary practices. On this platform, consumers can provide details of conduct, the perpetrator, location and where applicable, pictures that aid investigation.
On the 23rd of April, 2020, the Commission issued an update stating that criminal charges had been brought against flagrant violators, and investigations were being carried out on other industries and players. This new development is not to prevent market players from implementing necessary adjustments, rather, the objective is to prevent unjustified price hikes and facilitate the collaboration of consumer good providers in a regulated manner.
The steps taken by FCCPC have led certain establishments to adjust market practices accordingly. In March 2020, JUMIA Nigeria, an online market delisted 390 products belonging to 168 sellers of hand sanitizers and face masks from its platform due to an unreasonable increase in the price of the products. The online market also put up a warning on its website, stating that any seller who is found envisaging in the unwholesome practice of arbitrarily increasing the price of protective and hygienic products will be subjected to investigations and penalties by the FCCPC.
In other African countries such as Namibia, the commission in charge of competition, the Namibian Competition Commission (NaCC) formed a dedicated task team under its Enforcement, Exemptions & Cartels Division, to investigate and prioritize price exploitation complaints concerning essential healthcare and hygiene during the COVID-19 crisis. The Competition Authority of Kenya (CAK) also published cautionary note warning manufacturers and retailers that are involved in any form of price manipulation behavior will be subject to an administrative penalty of up to 10% of turnover.
Competition authorities in Africa at large are aware of the effects of the unreasonable and arbitrary increase in the price of consumer goods on the citizens and the nations’ economies. This can prevent a larger part of the populace from purchasing essential healthcare and hygiene commodities which can trigger a bigger crisis in the spread of the virus and economy-wise, a return of inflation.
Hence the timely response of establishing investigation teams, websites, and helplines is timely and necessary. African competition authorities have further noted that collaboration between themselves and consumer protection authorities, as well as between competing essential consumer goods provider is essential to enable countries to adequately respond to the COVID-19 crisis.
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Oluwatumininu Jimoh
Corps Member attached to FRC
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