The Federal Competition and Consumer Protection Commission (FCCPC) has announced a crackdown on price fixing and profiteering by market players, set to begin after September 2024. The announcement was made yesterday in Abuja during a “Stakeholders Meeting on Exploitative Pricing,” during which the commission detailed its plans to address unethical pricing practices in Nigeria.
Executive vice chairman and chief executive officer (CEO) of the FCCPC, Tunji Bello, in his address, emphasised the gravity of the situation and the commission’s resolve to combat price fixing and gouging. He noted that the FCCPC has allowed a one-month moratorium, giving businesses until the end of September to comply with pricing regulations before stricter enforcement actions are implemented.
“The issue of critical national importance of the day is the growing trend of unreasonable pricing of consumer goods and services across the country, and the unwholesome practice of market associations engaged in price fixing,” Bello stated. “Our gathering here today is to underscore the gravity of the situation and urgency of the need that we both work together to check this unwholesome development.”
Bello explained that while the FCCPC recognises that exchange rate fluctuations have impacted production costs, many price adjustments are excessive. He illustrated this with recent findings from market surveys, citing instances where prices were significantly inflated without justification.
“To be sure, we quite recognise that an unfavourable exchange rate has negatively impacted the cost of production in local currency. However, the margin in pricing of goods and services is rather unreasonable or excessive in not a few cases,” Bello said. He highlighted that the margin in the prices of imported goods and locally produced items often appear excessively inflated.
“For instance, our check just two days ago at a popular supermarket chain in Texas, United States, revealed that a fruit blender called Ninja is displayed on the shelf at $89 (roughly N140,000). Meanwhile, the same product was displayed at a popular supermarket at Victoria Island in Lagos for N944,999 on the same day and at the same hour. This represents more than 500 per cent inflation of the cost,” Bello detailed.
He continued, “Interestingly when our undercover officer visited the same supermarket two weeks earlier, this same blender was on display with the price tag of N750,000. The question then arises: what is the basis for this arbitrary hike in the price of the blender compared to the United States? What business principle can justify this level of profiteering?”
Bello further cited additional unpleasant discoveries from the FCCPC’s investigations.
In various supermarkets surveyed discreetly in Abuja, Kano, Port Harcourt, and Lagos, prices were found to be arbitrarily increased without justification. For example, in one large Abuja supermarket, consumers were charged N2,600 for an imported toilet soap at the payment point, despite the price tag not being displayed as mandated by the FCCPC. The same soap was priced at N1,950 in a popular supermarket in Lekki, Lagos on the same day—constituting a double offence.
The FCCPC also identified a pattern of arbitrary price hikes among foodstuff sellers and transport operators.
The FCCPC helmsman questioned the justification for a tomato seller doubling the price of a basket of tomatoes due to increased transport costs, especially when a lower price was available at another market within the same jurisdiction.
He explained that price fixing is prevalent in various sectors, including foodstuff markets and public transportation. He described how market cartels manipulate prices by buying goods at low rates from producers and selling them at inflated prices to retailers, who then pass on the high costs to consumers.
“In a typical foodstuff market environment, this is how price fixing happens. A trailer-load of yam tubers arrives Wuse market in Abuja from, say, Benue State. Rather than allow free trade, the market cartel then inserts themselves between the produce farmers and the retailers. They buy in large quantities from the producer at cheap rate and, in turn, sell to market retailers at much higher price,” Bello explained.
Bello emphasised that price fixing and gouging are unethical and illegal under the Federal Competition and Consumer Protection Act (FCCPA). “Price gouging and price fixing are not only unethical but patently illegal under the FCCPA,” he said. “The FCCPC has the will and the capacity to invoke the full weight of the law against those found culpable of exploiting consumers.”
He highlighted that the FCCPC’s approach is focused on dialogue and collaboration, rather than being adversarial. “Through constructive engagement, we aim to establish a framework for reasonable pricing that benefits all stakeholders, particularly the consumers who are the backbone of the Nigerian economy,” Bello said.
Bello reiterated that the FCCPC is aligned with President Bola Tinubu’s renewed hope agenda, prioritising the welfare of Nigerians. He warned that violators would face severe penalties under Section 155 of the FCCPA, which includes substantial fines and imprisonment. “We will invoke the full force of the law against those exploiting consumers for undue profit,” he stated.
He further explained specific penalties under the FCCPA, noting that Section 107 (4a) provides up to three years of imprisonment, fines not exceeding N10 million, or both for individuals found guilty of price fixing. Section 107 (4b) for corporate entities stipulates fines of up to 10 per cent of the company’s turnover from the preceding year.
Bello concluded by reaffirming the FCCPC’s commitment to ongoing dialogue, monitoring compliance, and taking decisive action as necessary. “As we move forward, I call upon all stakeholders present to embrace the spirit of patriotism and cooperation. The FCCPC is committed to ensuring that market practices align with national priorities and do not worsen the economic pressures on Nigerians,” he said.
