Basco Paints, Del Monte hit with Sh21.5m fine for unfair trade practices

Basco Paints and Thika-based fruit juice processor, Del Monte, have been slapped with antitrust fines totalling Sh21.5 million by the Competition Authority of Kenya (CAK) for engaging in unfair trade practices.

In a notice published in the Kenya Gazette on Friday, the competition watchdog said it fined Del Monte and the Dura Coat paint maker Sh776,025 and Sh20.8 million respectively for contravening sections of the Competition Act that seek to protect consumers from misleading representations and unfair conduct by businesses.

“The Competition Authority has entered into a settlement agreement with Basco Products after the Authority initiated investigations of an alleged collusive conduct between certain manufacturers and distributors of paint products in Kenya,” said CAK director general Wang’ombe Kariuki.

Mr Wangombe said the paint maker had subsequently made plans to desist from anticompetitive conduct without divulging additional details.

But sources told Business Daily that three other firms are also on the watchdog’s radar for price-fixing.

In the case of Del Monte, CAK said the fruit juice maker had contravened Section 55 (a) (i) of the Competition Act which deals with compliance of standards of goods.

“A person commits an offense when in trade in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services falsely represents that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use,” states the Act.

The watchdog did not divulge the exact nature of the breach of standards by Del Monte.

The Competition Act empowers the regulator to impose a financial penalty of up to 10 percent of the value of sales of the goods or services under investigation.

Basco Paints and Del Monte could not be reached immediately for comment.

Del Monte has leveraged the growing ready market for juice among Kenya’s growing middle-class as it increasingly seeks alternative to carbonated soft drinks.

Basco Paints flagship Dura Coat brand includes paint products for interior and exterior finishes.