By Dr Temu

Competition law is more than a set of rules it is the backbone of a fair and thriving economy. In Tanzania, the Fair Competition Commission (FCC) has once again demonstrated its vigilance by launching an investigation into alleged anti-competitive practices by The Coca-Cola Company (TCCC) and Coca-Cola Kwanza Limited (CCK).

At issue is the claim that TCCC has applied dissimilar conditions to equivalent transactions when selling Coca-Cola concentrates to bottlers in Mainland Tanzania. Such practices, if proven, risk undermining the very principles of market fairness by restricting competition, disadvantaging smaller players, and ultimately harming consumers.

The FCC’s provisional findings, issued on 20th December 2024, mark a critical step in enforcing Section 10(1) of the Fair Competition Act (FCA). This case is not just about one company—it is about the integrity of Tanzania’s markets, the protection of consumer welfare, and the credibility of regulatory institutions in ensuring that no firms compete on fair ground.

Understanding Dissimilar Conditions & Their Effect on Competition

One of the core allegations against The Coca-Cola Company (TCCC) and Coca-Cola Kwanza Limited (CCK) is the application of dissimilar conditions to equivalent transactions. In simple terms, this means that bottlers purchasing the same Coca-Cola concentrates were subjected to different contractual terms, pricing structures, or commercial obligations, despite engaging in transactions of similar nature. Such practices may appear technical, but their impact on the market is profound:

  1. Unequal playing field where bottlers receiving less favorable terms are disadvantaged compared to competitors who enjoy preferential treatment.
  2. Market distortion where by selectively favoring certain distributors, dominant firms can shape market outcomes in their favor, reducing genuine competition.
  3. Barriers to entry as smaller or new bottlers face higher costs and operational hurdles, discouraging them from entering or expanding in the market.
  4. Consumer harm because consumers ultimately pay the price through higher costs, reduced choice, and slower innovation when competition is restricted.

In essence, dissimilar conditions are not just a contractual irregularity. They are a mechanism through which market power can be entrenched, competition suppressed, and consumer welfare compromised.

Why Does this Matter?

The core allegation against The Coca-Cola Company (TCCC) and Coca-Cola Kwanza Limited (CCK) is that they applied dissimilar conditions to equivalent transactions when selling Coca-Cola concentrates to bottlers in Mainland Tanzania. In practice, this means that bottlers engaging in similar transactions were subjected to unequal terms—whether in pricing, discounts, delivery schedules, or credit arrangements. While such practices may appear to be routine business decisions, they raise serious competition concerns because they distort the market, entrench dominance, and disadvantage smaller or new entrants. The result is an uneven playing field where favored distributors thrive while others struggle, ultimately harming consumers through higher prices, reduced choice, and slower innovation. This is why the FCC’s provisional findings highlight the issue as a potential abuse of market power, contrary to Section 10(1) of the Fair Competition Act.

So What are FCC’s Power?

The Fair Competition Commission (FCC) is a statutory body with clear legal authority to safeguard Tanzania’s markets. Established under Section 62 of the Fair Competition Act (CAP 285 R.E. 2023), the FCC is empowered to investigate impediments to competition, including barriers to market entry and exit. Its powers include:

  1. Investigative authority where under Section 65(2)(g), the FCC can probe alleged anti-competitive conduct, gather evidence, and issue provisional findings.
  2. Procedural powers where, through its Competition Rules (2018), the FCC can invite submissions from affected parties, ensuring transparency and stakeholder participation.
  3. Enforcement powers, as the Commission can issue binding orders, impose fines, and direct corrective measures to restore fair competition.
  4. Oversight Role as the FCC monitors market conduct to prevent recurrence and maintain integrity in the business environment.

In essence, the FCC’s powers are designed not only to punish misconduct but also to protect the long-term health of Tanzania’s economy by ensuring that competition remains open, fair, and effective.

Likely Remedies if Found Guilty

If the Fair Competition Commission (FCC) ultimately concludes that The Coca-Cola Company (TCCC) and Coca-Cola Kwanza Limited (CCK) engaged in anti-competitive conduct, several remedies are available under the Fair Competition Act and the Commission’s procedural rules. These remedies are not merely punitive—they are designed to restore fairness, protect market integrity, and deter future misconduct.

Possible remedies include:

  1. Compliance Order, directing TCCC and CCK to immediately stop applying dissimilar conditions to equivalent transactions
  2. Contractual adjustments orders to ensure uniform terms and conditions across all bottlers to ensure a level playing field.
  3. Imposing fines proportionate to the gravity of the misconduct, serving both as punishment and deterrence.
  4. Providing redress or restitution to bottlers who suffered material harm due to discriminatory practices.
  5. Establishing ongoing oversight mechanisms to ensure compliance and prevent recurrence.

These remedies, if enforced, would send a strong signal that abuse of market power will not be tolerated in Tanzania. More importantly, they would reaffirm the principle that competition must be based on merit, efficiency, and innovation—not favoritism or unequal treatment.

Conclusion

The FCC’s investigation into Coca-Cola is more than a regulatory exercise. It is a reminder that fair competition is the lifeblood of a healthy economy. When dominant firms are held accountable for practices that distort the market, it protects smaller businesses, encourages new entrants, and ultimately benefits consumers through better prices, quality, and choice. By enforcing these standards, the FCC not only safeguards Tanzania’s markets today but also builds confidence in the future of its economy, showing that growth must be driven by fairness, innovation, and respect for the rule of law.
Disclaimer:    The information contained in this legal update is for information purposes only and does not constitute legal advice, nor does it create an attorney-client relationship. For more information and professional legal counsel,

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