CEMENT dealers engaging in unscrupulous acts of inflating prices of the construction material risk severe penalties, the Fair Competition Commission (FCC) has strongly warned.
According to a statement issued on Friday by the Commission, the malpractice by dealers in the important construction material was detrimental to the country’s prosperity.
The FCC warning came amid government directives that require Regional Commissioners to probe the reported nationwide shortage of cement which has led to increased prices.
Prime Minister Kassim Majaliwa gave a four-day ultimatum to the RCs to probe the cement crisis soon after he was sworn-in by President John Magufuli, at the Chamwino State House on Monday, telling them to submit the report to him on Friday (November 20).
The premier wondered why there was an increase in the price of cement, taking into account that the government had improved transport infrastructure and business environment. The price for a bag of cement that is usually sold between 15,000/- and 16,000/- depending on the brand, is now available at between 19,000/- and 24,000/-.
FCC Director General, Dr John Mduma said that investigation conducted by the Commission in the Mainland has discovered the breach of Fair Competition Act, as dealers formed cartels in price setting and hoarding the product with the intention of hiking prices.
“This market behaviour indicates breach of the law governing fair competition... the commission warns all producers, suppliers, wholesale and retailers to stop inflating the price of the commodity,” Dr Mduma said.
He said that the commission through the Fair Competition Act No 8 of 2003 conducted market investigation and discovered that some traders were selling the commodity up to 20,000/- per 50kgs in order to maximise profit.
Dr Mduma said the commission is currently conducting an investigation, adding that it had summoned some documents from key stakeholders in the industry, noting that legal measures will be taken against those who will be found guilty of breaching the law.
He reminded the public to make sure they are provided with receipts whenever they buy commodities. However, several distributors have attributed the crisis to high demand for the building material.
They said that available supply could not meet the huge demand for cement for major infrastructure projects and individual use for construction of residential and commercial high-rise buildings.
Executive Director of Moshi-based Five Star Hardware Limited, Frank Alfred said cement supply was not sufficient to meet the rising demand from new construction activities by the government and the people as the holiday season approaches.
He said there was a significant demand growth of cement from government supported infrastructure projects and booming construction activities in urban and semi-urban areas to meet rising housing needs due to rapid urbanisation.
According to him, they used to send ten trucks to a cement plant and they will all be loaded with cement immediately, but of recent, it was taking nearly ten days to load one truck.
Cement manufacturers were taking longer than usual to meet their supply orders, he said, noting that there are problems in supply.
Executive Director of Mnazi Trading Company, another cement distributor in Moshi, Frank Ngowi, was also of the view that the price hike was a result of increasing demand against declining supply.
He said there was shortage of cement caused by high demand and low supply of the item, which leads to price increase and even smuggling