Dangote in Sugar price fixing scandal

 

BUA Group, one of the main competitors of Dangote Sugar has accused the company of fixing the price of sugar, and also threatening to cripple its business when BUA refused to agree with the price fixing plans.

It was alleged that Dangote Sugar representative had approached BUA Sugar founder, Abdulsamad Rabiu, to increase the price of sugar during Ramadan last year due to improved demand.

But BUA turned down the suggestion, choosing to leave its price at the same rate. Prior to Ramadan, the price was N13,000 per bag, but Dangote and one other market competitor wanted the price increased to N30,000 per bag.

It was learnt that when Rabiu resisted, they threatened his sugar operation by petitioning the Trade Ministry that BUA didn’t have the license to sell sugar within the country, as his business approval was only for export.

Reacting to the allegations, Dangote Sugar’s Group Managing Director, Ravindra Singhvi, in a statement said the company wasn’t involved in price fixing. The firm said it doesn’t manipulate price movement in the market.

He said that the allegations were a ploy to negatively impact the image of Dangote Sugar Refinery and Dangote Industries Limited, “DSR does not engage in artificial price manipulation of its products, either during the Holy month of Ramadan or at any other time.

“We have never ever increased the price of our food items or commodities during the Holy month of Ramadan in the history of our operations”, he said, adding that the company considers price-fixing to be unethical.

Meanwhile, Dangote said the company reported its rival to the ministry of trade because BUA could affect the National Sugar Master Plan’s (NSMP) framework.

“DSR highlighted a matter (BUA’s operation of a Sugar refinery in the Free Trade Zone in Port Harcourt, exporting refined sugar into the Custom territory) which may circumvent the National Sugar Master Plan’s (NSMP) framework and jeopardize its objectives by taking advantage of the location of its Port-Harcourt Refinery in the Free Trade Zone.

“DSR made this notification to the Hon. Minister of Industry, Trade & Investments bona fide, via its letter to the Minister dated January 28, 2021 asking the Minister to investigate the matter”, Singhvi said in the letter.

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