Public service vehicles parked along Kenneth Matiba Road, Nairobi.
Parliament has directed the Competition Authority of Kenya (CAK) to probe claims that multinational companies have locked out local firms from accessing multi-billion-shilling logistics contracts.
The National Assembly’s Committee on Trade, Industry, and Cooperatives said the competition watchdog has 30 days to investigate claims of price bidding and anti-competitive behaviour by multinational firms operating in the country.
“This committee directs you to immediately launch investigations into the matter of contract awards and subcontracting between parties entering into contracts with these multinational firms to establish whether there is anti-competitive or bid rigging behaviour,” Maryanne Keitany, the vice chairperson said.
“We will require you to investigate not only the behaviour of foreign firms in the transport and logistic sector as demanded by the KTA but the entire sector where multinationals operate" she added.
The committee issued the directives following complaints by the Kenya Transporters Association (KTA) which claimed unfair treatment and discrimination of local investors in the transport and logistics sector by multinational companies.
The KTA in its petition to the committee wants a review of all deals by foreign companies on warehousing, transport, and security.
The directive by the MPs came after CAK Director-General Adano Roba, told the Committee that the watchdog had not probed the issues raised by KTA.
He said the concerns raised by the transporters fell within CAK's mandate and would investigate them if directed by the MPs to do so.
“In order to ascertain the claims by KTA, the CAK may seek to interrogate the contracts entered between the multinational companies to establish the presence of anti-competitive clauses,” Dr Roba said.
The CAK boss appeared before the MPs shortly after two multinational food processors- Unilever Kenya Limited and Nestle Kenya Limited denied claims of anti-competitive behaviour through contracts designed to lock out local transport and logistics firms.
Unilever Kenya and Nestle Kenya told the committee that all their transport and warehousing operations are handled by local companies fully owned by Kenyans.
“We have a total of 15 logistics suppliers in Kenya, three suppliers in warehousing and 12 suppliers in transport,” Luck Ochieng, Unilever’s managing director, said.
“Out of 15 suppliers, Unilever has three locally incorporated entities that are subsidiaries of global companies while 12 local entities have no global parent company structure” he added.
In warehousing, Mr Ochieng told MPs that out of the three suppliers, two are local entities that have no global parent company structure, while one (AGL Kenya) is a local entity that is a subsidiary of a global company.
Mr Ochieng said out of 13 suppliers in the Transport, Clearing, and Forward, 11 are local entities that have no global parent company structure while 2 are local entities that are subsidiaries of a global company (DHL Supply Chain and Mearsk).
Gibson Singen, the Nestle Chief Finance Officer told MPs that the manufacturer of Milo, Nescafe, and Maggi seasoning cubes has only two local suppliers.
“In the transport and logistics, the tender was awarded to local companies which are 100 percent locally owned,” Mr Singen told the committee.
“We do open national tender and out of 15 firms that bid for the tender we issued in 2020, we picked two which met the stringent conditions attached to food handling and transportation of fragile goods.”
