Comesa probes Coca-Cola over anti-competitive conduct
Comesa alleges that Coca-Cola Company has made anti-competitive contracts with its affiliates in Africa. Photo / NMG
What you need to know:
- Coca-Cola is alleged to have entered into agreements or arrangements with its affiliates in Africa that could be detrimental to competition in Comesa
Beverage giant Coca-Cola Company is being probed by the regional anti-competition watchdog for its business conduct in the Common Market for Eastern and Southern Africa (Comesa).
The company is alleged to have entered into agreements or arrangements with its affiliates in Africa that could be detrimental to competition in the Comesa region.
The probe is being conducted by Comesa Competition Commission, a regional body that monitors anti-competitive conduct by businesses operating within the region, of which Uganda is part of.
The agreements under probe relate to bottling and distribution, which allegedly restrict how Coca-Cola products are distributed, thus limiting competition by giving the beverage company an unfair advantage over others.
“The Commission has reason to believe that [Coca-Cola] has concluded restrictive bottlers’ and restrictive distribution agreements … with affiliates in Africa, which affect trade between member states and have as their object or effect the prevention, restriction or distortion of competition within the common market,” an October 14 notice by Comesa Competition Commission, reads in part.
The agreements, Comesa alleges, are made in a way that blocks competition across multiple countries, which could distort the balance of the market in favour of Coca-Cola, while at the same time create a scenario where consumers have few choices, thus being exposed to high prices.
“The Commission will thus assess the conduct of [Coca-Cola] to determine its effects in the common market and apply appropriate measures as provided,” the notice further reads.
Article 16 of the Comesa Competition Commission Regulations prohibits any agreements that negatively affect trade between member states in the region.
The Comesa Competition Commission will thus review the agreements in question and determine if they restrict competition. However, the Commission noted that the start of the probe was not in any way concluding that Coca-Cola was guilty of violating competition rules, but was a step in gathering information.
The Commission is expected to conduct a formal inquiry to evaluate if Coca-Cola’s agreements have the "object or effect" of limiting competition in the Comesa.
On Wednesday, Mr Kirunda Magoola, the Coca-Cola Beverages Africa, Uganda public affairs and communications director, declined to comment on the matter, citing ongoing legal proceedings.
