Dangote Sugar Refinery has reported BUA Foods Plc to the Anti-Competition Commission over allegations that it has suspended the sale of sugar in a bid to create artificial scarcity and blackmail government.
The formal complaint was made to the Federal Competition and Consumer Protection Commission (FCCPC) on February 14, 2022 by Dangote.
BUA had on Monday, February 14 alleged that Dangote had suspended the sale of sugar in a bid to create artificial scarcity, force prices to artificially go up, profiteer even more and blackmail the government to review the denial of allocations to another competitor due to compliance issues.
But in a Notice to the Exchange, Company Secretary of Dangote Sugar Refinery, Mrs. Temitope Hassan, on Thursday, the firm said there was no truth in BUA’s allegations.
Hassan said: “In compliance with the requirements of the Rulebook of the Nigerian Exchange Limited, DSR wishes to strongly refute the allegations and assertions in their entirety as these false allegations may mislead the market and may give an undue competitive edge to BUA.
“We believe this behaviour exhibited by BUA is worrisome and appears to conflict with the anti-competition rules. Last year, just before the commencement of the Ramadan (the Islamic holy month of fasting), BUA made similar false allegations against the company that it was engaged in ‘price-fixing’ and not honestly pursuing the Backward Integration Project.
“In response to this, we published a Press Release (published on the Issuers’ Portal on April 14, 2021) to refute the false allegations and made a formal complaint to the Anti-Competition Commission. Another formal complaint was made to the Commission on February 14, 2022 and we await their actions to address the situation.
“In line with our plan, we have continued to supply sugar to meet the market’s demand and have made the necessary supply chain and logistics investments/arrangements to ensure there are no risks to our ability to meet the current market demands.
“Dangote Sugar Refinery Plc. remains the highest sugar supplier in the market today, with over 1.44m MT installed capacity at our Apapa Refinery and we are the only company producing sugar from own grown sugarcane under the Nigeria Sugar Master Plan (NSMP) at the Numan operations in Yola, Adamawa State.
“We remain committed to fair play and good governance and would continue to supply sugar to the market without interruptions.”
BUA Foods had accused Dangote of making moves to create sugar scarcity and increase the price of the product in the country.
The company said it would not stop selling sugar following the suspension of the product’s sales by Dangote Sugar and Flour Mills.
BUA, while reiterating that Flour Mills stopped the sales of sugar over compliant issues by the government, said the stoppage by Dangote may be intended to create scarcity, and blackmail government to review the denial of allocation to Flour Mills.
The company added that it has the capacity to meet 90% of the nation’s needs, noting its readiness to stop all sugar exports and channel to meet local demand.
BUA further cautioned against panic buying, adding that it would not be a party to any stoppage of sales or hike in the price of sugar.
The company stated: “Whilst the suspension of sales of Sugar by Flour Mills may be understandable because the 2022 raw sugar allocation has been declined by the government due to compliance issues, we do not understand why Dangote has joined. In our opinion, this stoppage may be intended to create scarcity, force the prices to artificially go up, profiteer even more, and blackmail the government to review the denial of allocation to Flour Mills due to compliance issues.
“We believe that government should not be blackmailed into rescinding a compliance-based decision and the process should be allowed to follow its due and proper course in any event, we would like to reiterate that BUA does not intend to join this suspension of sugar sales nor increase prices between now and Ramadan (a peak demand period for Sugar) as the others have done.”
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