Campaign Against Manufacture of Sub-standard Goods

The Federal Competition and Consumer Protection Commission is up in arms against the manufacturing of sub-standard products and other deceptive trade practices, writes Dike Onwuamaeze

The Federal Competition and Consumer Protection Commission (FCCPC) is beaming its search light on the steel manufacturing sub-secton. The commission, through intelligence and surveillance reports, is suspecting that manufacturing of sub-standard iron rods products and other anti-competitive conducts are going on in that sub-sector. These sub-standard products are also believed to be behind the incessant collapse of buildings that have caused loss of many precious lives and properties.

On June 28, the Acting Executive Chairman of FCCPC, Dr. Adamu Abdullahi, lead the commission’s investigators to storm three steel manufacturing firms in Ogun State to investigate an allegation of manufacturing of sub-standard products and other deceptive trade malpractices.

Abdullahi explained that the commission is doing this to protect the interest of consumers out of concern that buildings are collapsing and Nigerians are dying. Therefore, “we are looking for any issue where they are cutting corners.”   

The affected companies were African Foundries Limited (AFL), Ogijo, Ogun State; the Monarch Steel Mill Limited, Sagamu, Ogun State and the Kam Steel Integrated Company, Sagamu, Ogun State. These companies were alleged to have been producing 10 mm iron rods and selling them as 12 mm iron rods.

Abdullahi, who addressed journalists at the premises of AFL, said: “Essentially, we got intelligence and surveillance reports that these companies in question are allegedly involved in some anti-competitive behaviour. That is the reason we decided to come to these three companies.”  

According to him, what has been going on is that some manufacturers would produce 10mm iron rods but label and market same as 12 mm iron rods.

This market behaviour, he said, is among the major causes of building collapse in Nigeria.

“We are talking here about the issue of safety of Nigerians, which is the core essence of consumer protection.

“We have to ensure the safety of our population. What is happening in the building space so far is worrisome to the government and all well-meaning citizens of this country.

“So we have to look at their process to find out if they are cutting corners. If they are doing so, we will apply the full wrath of the law. That is why we are here.”

He added that it is of concern that buildings are collapsing in this country as a result of substandard building material products.  “But we will give you the assurance that we cannot allow people to continue dying.” 

He, however, emphasised that the FCCPC is on a fact finding mission and have not found any of these companies liable yet.

“We are still at information gathering stage. After which we have to go back to our office and allow forensic experts to look at the information that we returned with.

“What they will take out from all the materials we have gathered will then guide our findings,” Abdullahi said.

He also clarified that the activities of the FCCPC are not in conflict with roles of the Standard Organisation of Nigeria (SON) or related to the reasons multinationals are exiting from the Nigerian market

The SON is after standards and the commission collaborates with SON. However, the issues that brought the commission to the factories of the steel manufacturers were largely market related issues.

“What do they do in the market that is right and what do they do that is wrong.  We are guided by our Act. We have the rules and we work strictly by it. We go on surveillance exercises. We look at how industries and markets operate.  

“If you go into the market to buy a 12mm iron rod for instance and 10mm is sold to you in the pretext that it is 12mm. That is false, misleading and deceptive. It is unfair market practice. These are the intelligence that we have gotten and we have come to find out whether there is truth in that claim or not,” Abdullahi said.

He stated that wherever a multinational goes it would not escape operating under regulations because there are competition and consumer protection laws in every part of the world.

“We are here to protect competition and consumers in Nigeria. And they know that same applies wherever they may go.

“If you have noticed you will see that immediately we arrived they told us what standard it is they operate on, and that they have The UK’s standard and the SON’s standards. We are going to look at their product based on the standard with which they produce.

“Our job cannot be responsible for people exiting from Nigeria. Compliance is what they do all over the world. In some countries that are major producers, you will find out that the regulators are even harsher than we can ever be in Nigeria.

“It is just a matter of having a strong regulatory regime, which is what we are trying to build in Nigeria. Let us have consequences for bad behavior and people will fall in place and do what they are supposed to do. Our people will be better for it.

“It is of concern that buildings collapse in this country. It is a result of substandard product. It is a good thing that we find out what those products are and whether they are being produced according to standards.”

Beyond the manufacturers, the FCCPC is also taking on retailers and owners of supermarkets in a bid to checkmate sharp anti-competition activities such as price gouging. Price gouging is the practice of increasing the prices of goods to a level much higher than is considered reasonable or fair.

In furtherance of this objective, the FCCPC held a meeting with the stakeholders and members of the Retailers Council of Nigeria (RCN) and National Association of Supermarket Operators of Nigeria (NASON) and have agreed to set up a technical committee that would produce a Memorandum of Understanding (MoU), which would help to checkmate price gouging and the divergence between the shelve prices of goods and their actual prices at the till.

He illustrated this with what the FCCPC found out in an Abuja based supermarket where the commission took three pieces of kwuli-kwuli that were of the same brand, size and date of manufacture but their prices at the till varied. One was N700, another N900, the third one was N1,100.  

Abdullahi said: “What we are worried about is this issue of price gouging. We have held an executive session with the stakeholders and have discussed and understood each other.

“We know most of these things but we believe that we are on the right path because we have agreed to form a technical committee that will draft an MoU and we are going to work hand in hand henceforth to have capacity building among us so that we will understand each other, both from the side of businesses and regulators. 

“By the way things are going we have already gotten the understanding of the retailers. They are willing partners and that is what we want.”

He added that the MoU would address the rights of consumers to return malfunctioning goods to the retailers and have them either repaired or replaced.

“We must educate them on what our law says about retail trade and let them abide by the law. This MoU will address these issues we are raising. If the retailers do not know, they would be reminded that the requirement of the law is to display prices of goods on the shelves that agree with the rate on the till. Otherwise it is false, misleading and deceptive, which is against the law,” Abdullahi said.  

In his remarks, a Trustee of RCN/NASON, Mr. Haresh Keswani, who is also the Group Managing Director of Spar Nigeria, thanked the leadership of the FCCPC for the commission’s open mindedness to understand the importance of retail business in Nigeria.

Keswani said that the retailers and supermarkets operators are currently struggling to survive the declining purchasing power of Nigerians that have resulted in more than 50 per cent fall in volume of sales.

He added that being compliant in Nigeria is an expensive proposition in terms of paying salaries on time, taxes, power and energy bills and following the rules and regulations.

Keswani said: “The last two years have been frightening for us. What is the intention of the retailers? They want the prices to be lower so that the consumers will afford them and buy more. 

“We are not happy with our (current) volume of sales. The volume of goods has gone down by 50 per cent. If we were selling 10,000 creates of non-alcoholic beverages in a year, today the sale is not even up to 5,000.” 

He emphasised that there are four major pillars in the distributive trade’s value chain, which are the manufacturers, distributors/brand representatives, retailers and the consumers, adding that the whole idea of this stakeholders’ meeting is for the FCCPC and the RCN to sit down and understand who takes what responsibility along the value chain.

According to him, their “responsibility as retailers lies with how well we display our products and engages with the customers to sell them.

“There is also responsibility for the consumer. Even though he wants to be protected, he should also protect himself.”

He said that the meeting is a continuation of what the RCN and NASON started with the FCCPC in 2022. 

“In today’s meeting we have taken a huge leap forward. Our goal is to first understand the gaps in the value chain, set up further workshops to give further clarity on those gaps. 

“We are trying to work on a document (MoU) that harmonises the interest of each pillar. The intention is harmony and is not something that can be done overnight,” Keswani said.

He, however, emphasised the importance of education in this collaboration since “compliance without proper education is a futile effort and will continue to be a case of using the cane to run behind the child without the child understanding why he is being flogged.”