FCCPC Vows to Move against Trade Associations Behind High Food Prices in Nigeria

•Traders not responsible for high food prices, association tells agency

Dike Onwuamaeze

Barely a week after President Bola Ahmed Tinubu’s administration declared a state of emergency on food security, the Executive Vice Chairman of the Federal Competition and Consumer Protection Commission (FCCPC), Mr. Babatunde Irukera, has threatened to proceed against market associations that have formed themselves into illegal cartels for orchestrating upward manipulation of food prices in the country.

Irukera, issued the threat yesterday, during the, “Fair Food Prices in Nigeria, Multi-stakeholder Workshop,”  which was organised by the FCCPC and the Consumer International, a foreign non-governmental organisation, in Lagos State.

He said: “It is associations, whether in input supplies in fertilizer or market traders’ association that constitute cartels that are increasing food prices.

“There are issues like price gauging, anti-competitive conduct and some commercial issues that certainly contributes to the extremely high food prices. We will identify some of these issues and develop strategies to tackle them.

“The trade associations in many places have become cartels that are illegal. I can understand why trade associations are important but certainly not to discuss pricing, supply or restricting supply or demand that happens in some of the trade associations.”

He added: “Trade associations are vital and important to business; they are import to the wellbeing of the society but there are limitations on what they should engage in. One of the most important limitations are the control of supplies or affecting trade and commerce in a manner that reflects in price.

“Market associations and transport associations should know that they should promote commerce and not destroy trade. We must in addition to advocacy develop strategies for enforcements. We must have the will and the stamina to proceed against them.”

He also tasked governments and regulators on the need to muster the will to focus on very hard decisions, painstaking efforts, desired commitment as well as stamina to develop and enforce strategies that would deal with these cartels.

 Irukera said: “Part of the things we will confront is how do these associations operate? What is the strategy for advocacy in dealing with them, and beyond that when advocacy fails what is the strategy for enforcement?

“There is little control that we have over climate change. But one thing that we as civil societies and regulators must never ever succumb to is citizens’ exploitation of fellow citizens. And if we do not prioritise that it will continue.”

He clarified that the FCCPC is not only to regulate the big companies or the formal sector; it is also to regulate the informal sector. The purpose of competition regulation is to unlock the market and enable it to behave the way it should and let price be negotiated between a seller and a buyer, which is always the surest way to arrive at the fairest possible price.

“Any action by an association or a group or combination of businesses that affect or diminish free market competition is wrong and most unacceptable when it happens in foods and worst when it happens in place like Nigeria, with rising poverty, population and inflation on citizens with limited income and the amount of disposable income that is spent on food.”

He found it regrettable that associations would come together to determine what prices beans should be sold and to determine that nobody in a particular market should take rice or beans etc. from any other person except members of their association.

However, a representative of the Marketers and Traders Association of Nigeria, Mr. Ayo Abiola, has refuted the allegations that market associations were manipulating the prices of food items.

Abiola, said Nigerians shy away from focusing on the real factors responsible for food price hike like the multiple taxations and extortions that happen from the point food products leave the farm till it gets to the market.

He said: “It is a shame that while prices are going down in the rest of the world the reverse is the case in Nigeria. When the product leaves the primary source and is going to the intermediary and to the final point, we wonder why the price has jumped from this from this point to that point.

“We did an investigation about three months ago that when your product leaves the port within Lagos to Alaba you will incur almost N1 million cost on that consignment.

“That is why as an association we have been shouting and thankfully our cry has attracted the ear of the federal government. Traders are not responsible for the problems.”

The representative of the Consumer International, Mrs. Davine Minayo, who is also a specialist, Fair Food Prices in Africa, emphasised the need to think on how to make food safe and fairly priced.

“The solutions are that countries need to support the competition authorities so that they are well empowered and well-resourced to address these issues. We also need more voice from stakeholders, especially consumers and small scaled producers,” she said.