Why FCCPC Slams $110m Penalty On BAT – Irukera
The Executive Vice Chairman of the Federal Competition and Consumer Protection Commission (FCCPC), Babatunde Irukera Thursday explained that British American Tobacco Nigeria Limited was slammed with a $110 million penalty because it engaged in anti-competitive conduct and violations of prevailing tobacco controls and public health measures.
He told ARISE NEWS on Thursday, Irukera that the fine was reduced to $110 million because the companythrough an administrative route to avoid judicial prosecution.
The FCCPC boss, speaking on the investigation into BAT, which started in 2020, and its conclusion said, “What the evidence ultimately showed was that the company and affiliates or associates had engaged in certain anti-competitive conduct and then violations of prevailing tobacco controls and public health measures.
“From an anti-competitive standpoint, investigation and market studies show that the company is a dominant player, and there are rules when you’re dominant, rules about your conduct. You shouldn’t act unilaterally in a way that distorts the market or potentially excludes competitors fromin the market.
“But some of the things we found out showed that this company had abused its dominant position, including using its reach and muscle to try and prevent the market entry of products of competitors, including working with elements within, even making requests to government institutions about how to characterise or tax devices or products of the competition.
looking at some of the manuals called TMRs, the trade marketing manuals, they are also training their trade reps on how to engage reward retailers who promote their products over other competitors and penalise those who provide a fair and even platform. That kind of conduct from a dominant player is abusive.
“In addition, in some of the records of information that weduring the investigation, we discovered that there was commercially sensitive information about their competitors in their records. Those are pieces of information you cannot get from public shows that you are monitoring competition in a manner that is inconsistent with the law.”
Irukera then revealed that the company representatives expressed a desire to resolve the issue without prosecution or a full-blownthen entitled them to benefits, such as their penalty reduced to $110 million, as they prevented the hassle of the judicial route.
He explained, “We have what we call the administrative penalties regulations, whichgazetted and I think it was in 2021, and it has a matrix. It calculates how penalties will be applied, the base minimum, depending on the conduct, and points for aggravations or mitigations depending coming into the corporation and assistance is a mitigation.
“Like most plea bargain regimes, when you save a regulator or a prosecutor or an investigator the time of having tothrough the whole hog and prosecute a case, there are some benefits that come from that. It could be a reduced penalty, it could be a waiver of prosecution of certain offences or charges or certain on what the circumstances are.
“So, based on the cooperation and assistance on the stand, we used the matrix to determinethe and assistance rules also allow the commission to provide additional mitigations the rules.”
Irukera then said that BATwithin some of the exceptions, and as a penalties”, as well as prosecutorial discretion.
He said, “What we did was for the charges thatbased on this mutual understanding, we didn’t file the some charges had already been in furtherance of the investigation, and so, we withdrew those charges based understanding.”
Speakingthe reason for such high penalties for these offences, Irukera said that that is what the law and that this law is not local to Nigeria, but is the same globally.
He said, “You’ve got to understand that distorting the market affectscannot. Consumers don’t get the And secondly, think about the fact that other businesses cannot space and thrive.
“Some just barely survivea big one in space, and some don’t even come in. Just imagine the amount of work the federal government is doing, including the president, out there trying to promote investments investors. At the end of the day, when we talk about how harsh the environment is, sometimes we focus entirely on what we think is the But in reality, many times, the biggest entry barriers are not the government, other businesses in concentrated markets.”
He further said, “The reasons why the fines are what they arevery important. First, it is to divest engaged in malfeasance of whatever they’ve profited from their malfeasance. And secondly, it’s to make sure that it’s not worth it for them to do it again. And even more importantly, it’s for others who are looking to say you know what, I’m not to get in this kind of conduct because this is what can happen to me.
“Finally, it’sso that others who are looking from outside and want to enter that market can say there’s a serious strong consequence management mechanism that will protect us when we in there.”