Report On Inquiry Into Alleged Discrimination Of Local Investors In Transport And Logistics Sector By Multinational Companies

THE-TABLE:

TABLED

19 NOV 2025

DATE:

AO

PAPERS LAID THENATIONAL ASSEMBLY

NATIONALASSEMBLY RECEIVED

1 9 NOV 2025

SPEAKER'SOFTICE P.O.B0X41842,NAIROB!

ABBREVIATIONS

BAT

BritishAmericanTobacco

CAK

Competition Authority of Kenya

MNCs

Multinational Companies

ToR

Terms ofReference

KTA

Kenya Transporters Association

EABL

EastAfrica Breweries Limited

CHAIRPERSON'SFOREWORD

It is my pleasure to submit this report on the inquiry into the alleged discrimination and unfair treatment of local investors in the transport and logistics sector by multinational companies operating in Kenya. This inquiry emanated from a formal complaint submitted by the Kenya Transporters Association (KTA) to the Departmental Committee on Trade, Industry and Cooperatives alleging that local transporters were being systematically excluded by multinational companies (MNCs) operating in Kenya. The Association posited that unfair trade practices in contravention of Kenya's competition laws and local content requirements.

Pursuantto theprovisionsof Article95(l)of theConstitution and Standing Orden 216(5),the Committee resolved to undertake an inquiry into the alleged systemid breaches of competition laws by multinational companies operating in Kenya as well as broader concerns relating to local content compliance in warehousing, transport, and related sectors, and potential transfer pricing practices by MNCs.

To this end, the Committee held seven (7) meetings with complainant Kenya Transporters Association (KTA), and key stakeholders including the Competition Authority of Kenya (CAK), British American Tobacco (BAT), Kenya Breweries Limited (KBL), GlaxoSmithKline Limited (GSK), Coca-Cola Beverages Kenya Limited, Nestle Kenya and Unilever Kenya Limited. These consultations provided critical insights into the nature of business practices in the logistics and warehousing sector and the regulatory safeguards in place to promote fair competition.

The comprehensive report by the CAK on the alleged abuse of dominant position by MNCs provided conclusive insights on the matters under inquiry, enabling the Committee to reach a definitive position on the allegations. Based on the evidence adduced, the Committee found that the allegations of discriminatory conduct, abuse of dominance, or predatory pricing by the multinational companies concerned were unsubstantiated and concluded that the matter did not warrantfurther action against the multinationalcompaniesconcerned.

The Committee unanimously adopted its report at a sitting held on 4h October, 2025.

I wish to express my appreciation to the Honourable Members of the Committee, the stakeholdersandtheCommitteeSecretariatwhomadeusefulcontributionstowards thepreparationandproductionofthisreport.

On behalf of the Departmental Committee on Trade, Industry and Cooperatives, and pursuant to the provisions of Standing Order 199(6), it is my pleasant privilege and honourtopresenttothisHousethe

Report of the Committee on its inquiry into allged discrimination of local investors in the transport and logistics sector by Multinational Companies in Kenya.

HON.BERNARD MASAKASHINALI,MP CHAIRPERSON,COMMITTEEONTRADE,INDUSTRYAND COOPERATIVES

1.0 PREFACE

1.1 Establishment and Mandate of the Committee

• I. The Departmental Committee on Trade,Industry and Cooperatives is one of the Departmental Committees of the National Assembly established under Standing Order 216 whose mandate pursuant to the Standing Order 216 (5) is as follows:
• b. To investigate, inquire into, and report on all matters relating to the mandate, management, activities, administration, operations and estimates of the assigned ministries and departments;

3. c.Tostudy theprogramme andpolicyobjectivesofministries anddepartments and theeffectiveness ofthe implementation;

(ba)on a quarterly basis,monitor and report on the implementation of the national budget in respectof itsmandate;

• d.To study and review allegislation referred to it;
• e.Tostudy,assess and analyse therelative success oftheministriesand departments as measured by theresults obtained as comparedwith theirstatedobjectives;
• fTo investigate and inquire into all matters relating to the assigned ministries and departments as they may deem necessary, and may be referred to them by the House;
• g.To vet and report on all appointmentswhere the Constitution or any law requires the National Assembly to approve,except those underStanding Order 204(Committee on Appointments); (fa)To examine treaties,agreements and conventions;
• h. To make reports and recommendations to the House as often as possible, including recommendation of proposedlegislation;
• (Deleted)

1. ToconsiderreportsofCommissions and IndependentOfficessubmitted to theHousepursuant to theprovisionsof Article254of theConstitution;and

• k.To examine any questions raised by Members on a matter within its mandate.

PART ONE

2. In accordance with the Second Schedule of the Standing Orders, the Committee is mandated to consider, Trade, including securities exchange, consumer protection, pricing policies, commerce, industrialization including special economic zones, enterprise promotion and development including Micro, small ∧ medium enterprise (MSMEs), and small and medium enterprise (SMEs), intellectual property, industrial standards, anti-counterfeit and cooperatives development. 3. In executing its mandate, the Committee oversees the Ministry of Investment, Trade and Industry and the Ministry of Cooperatives and Micro,Medium andSmall Enterprises (MSMEs).

1.2 Committee Membership

4. The House constituted the Committee on Thursday, 27th October, 2022 and comprises the following Members:

Chairperson

Hon. Benard Masaka Shinali, MP lkolomani Constituency

Orange Democratic Movement (ODM)

Vice Chairperson Hon.Marianne JebetKitany,MP Aldai. Constituency

United Democratic Alliance (UDA)

Hon.Robert Githinji Gichimu,MP Gichugu Constituency

Hon. Dr. Wilberforce Ojiambo Oundo, MP

Funyula Constituency Orange DemocraticMovement(oDM)

United Democratic Alliance (UDA)

Hon. Dr. Beatrice Kahai Adagala, MP Vihiga County Amani National Congress (ANC)

Hon.Joyce Kamene, MP Machakos County Wiper Democratic Movement-Kenya

Hon. Joshua Mbithi Mutua Mwalyo, MP Masinga Constituency IndependentMember

Hon.Anthony Tom Oluoch,MP Mathare Constituency OrangeDemocraticMovement(oDM)

Hon.Samuel Sakimba Parashina,MP Kajiado South Orange Democratic Movement (ODM)

Hon.Guyo Adhe Wario,MP North Horr Constituency KANU

Hon.Amos Maina Mwago, MP Starehe Constituency Jubilee Party

Hon. Adams Korir Kipsanai, MP KeiyoNorth Constituency United Democratic Alliance (UDA)

Hon.Michael Wainaina Wambugu, MP Othaya Constituency United Democratic Alliance (UDA)

Hon.Alfred Kiprono Mutai,MP Kuresoi North Constituency United Democratic Alliance (UDA)

Hon.Bwire John Okano, MP Taveta Constituency Wiper Democratic Movement-Kenya

I.3CommitteeSecretariat

• 5.The Committee Secretariat comprises the following technical staff:

Mr. Abenayo Wasike Principal Clerk Assistant I/Head of Secretariat

Ms. Carolyne Musyoka

Hansard Reporter Il (Clerk Assistant)

Ms. Everlyn Orina ClerkAssistantIll

Ms. Priscilla Wangu Fiscal Analyst II

Ms.Priscilla Saidi Research OfficerIll

Ms. Florence Wanja Protocol Officer

Ms.Pauline Sifuma Hansard OfficerIl

Mr. Cosmas Akhonya Audio officer

Ms. Peris Kaburi Sarjeant At Arms

Mr.Daniel Psirmoi Media Relations Officer II

2.0 INTRODUCTION

6. The Committee is in receipt of a letter from the Kenya Transporters Association (KTA) Limited, dated 6th February,2024.In the letter,the Association raised concerns about the discrimination of local investors in the transport and logistics sector by multinational companies (MNCs). 7. The, Kenya Transporters Association (KTA) Limited stated that, the Multinational Companies (MNCs) prefer to deal with fellow multinationals in the transport sector. This discrimination theysaidamounted tounfair tradingpractice. 8. The committee on Trade, Industry and Cooperatives invited Competition Authority of Kenya (CAK), Kenya Transporters Association (KTA), British American Tobacco (BAT), Kenya Breweries Limited (KBL), Nestle Kenya and Unilever Limited to submit their memoranda.

2.ITERMSOFREFERENCE

9. The Committee developed and was guided by the following terms of reference in conducting the inquiry; 2. (a) To establish whether unfair treatment of local transporters by multinational companies hascreatedanunfairbusinessenvironment; 3. (b) To assess the level of compliance withlocal contentrequirement in the warehousing, transport and related sectors by multinationals companies; and 4. (c) To establish whether transfer pricing by multinational companies has created an unfair business environment in the provision of transportation and logistics services.

PART TWO

PART THREE

• 3.0 SUBMISSIONSFROMVARIOUSMULTINATIONALCOMPANIESIN THE COUNTRY AND THE COMPLAINT BY KENYA TRANSPORTERS ASSOCIATIONONALLEGEDDISCRIMINATIONOFLOCAL INVESTORS IN TRANSPORTANDLOGISTICSSECTORBY MULTINATIONALCOMPANIES.
• I0. The Committee held meetings with various multinational companies and government institutions including the Competition Authority of Kenya (CAK), Kenya Transporters Association (KTA), British American Tobacco (BAT), Kenya Breweries Limited (KBL), Nestlé Kenya Limited and Unilever Kenya Limited.

They submitted as hereunder -

I.I SUBMISSIONS BY KENYA TRANSPORTERS ASSOCIATION (KTA)

• I1. Kenya transporters association (KTA) through its representative appeared before the committeeandsubmittedasfollows:

12. That the local investors in the sector of transport, logistics and Warehousing are not the local capacity and deal with fellow multinationals.This is affecting its members, and sought the committee indulgence to create a fair playing ground that will allow local 13. Additionally, they stated that many countries have introduced a percentage of local content to protect home ground businesses and felt that it is time Kenya took a similar approach.

• I4. The association, however raised their Key Areas of Concern as follow;
• iLimitedLocalParticipation:MNCs oftenoutsourcelogistics andwarehousing local companiesandhinderstheir abilitytocompete.
• i1 Disparity in Investment:Local entrepreneurs own the majority(90%)of trucks in Kenya, while MNCs contribute only 10%. However, MNCs secure over 70% of logistics contracts, leaving local investors with limited opportunities and unfair conditions.

• iUneven EconomicImpact:Local businesses typically reinvest profitswithin Kenya, economic growth, especially in sectors like transport with substantial domestic capacity.
• ivRegional and Global Markets: Kenyans in freight logistics aim to be prepared for regional, continental, and global markets, especially as integration efforts favor intraAfrican trade. However, achieving this goal requires a strong domestic foundation. Without a solid local foothold, Kenyan companies risk missing out on these opportunities,hinderinggrowthfor current andfuturegenerations.
• vUnfair Practices by Shipping Lines: Shipping lines engage in practices that stifle o o e s e e s e s se owning a clearing and forwarding (C&F) company, and managing an empty container depot. There have been allegations of these companies' preventing customs agents companies.

15. The association informed the committee about the following anti-competitive behaviors by MNCs in the Kenyan transport and logistics sector:

• iExclusiveContracts:MNCs secure exclusive agreements withkey suppliers on distributors, shutting out smaller local companies from essential resources and markets.
• treatment, while putting smaller competitors at a disadvantage.
• iiBarrierstoEntry:MNCsleverage their marketpower tocreate barriers thatmakeit difficult for new companies to compete effectively.
• ivAnti-Competitive Agreements: MNCs engage in collusive agreements with competitors or suppliers, such as price-fixing or market allocation schemes, to maintain their dominance.

• vPredatory Pricing: In some cases, MNCs resort to predatory pricing, temporarily amonopoly.
• vi Lack of Transparency: A lack of transparency in pricing and contracting practices by MNCs makes it challenging for regulators and competitors to identify anti-competitive

16. The association advocated for a quota system, where at least 60% of transport and logistics work is reserved for local Kenyan enterprises.Kenya has sufficient local capacity to justify this proposal.

I.2SUBMISSIONS BY KENYA BREWERIES LIMITED (KBL)

The managing director submitted that;

17. Kenya Breweries Limited is a local company, incorporated as a private limited liability company on8thSeptember1922.The firstbeerwasbrewedon14thDecember 1922. In 1926,KBL declared its first dividend of 12.5% at the first annualgeneral meeting, the first clear sign of the company's success and local heritage. 2. 18.Procurement of local raw materials began in 1929, when the KBL board decided to start improvingbeerappearanceandflavour.Whenthewarbrokeoutandthedemandforbeer increased in the 1940s,KBL held its first nationwide barley competition to encourage farmers to grow suitable barley. This became an annual event, marking the beginning of a new crop that benefited hundreds of farmers and made the company independent of overseassupplies. 19. In 1935, KBL acquired Tanganyika Breweries, which had been established in 1932 as a private company. In 1936, KBL and Tanganyika Breweries Limited merged, leading to the change of name to East African Breweries Limited (EABL). EABL would later acquire financial holding in Uganda Breweries in 1959. In 1962, a merger was completed with Allsopps (East Africa) Ltd, another beer company in Nairobi, and EABL became a holding company with KBL becoming the major trading company in the group, holding trading assets and liabilities for units in Nairobi and Kisumu.Inthe I980s,KBL established two plants in

Kenya, one in Kisumu for manufacture of beer and CGl which was producing glass bottles andwaslatersoldtoaSouthAfricanfirm.

20. KBL is currently the second largest taxpayer in Kenya with a total tax contribution averaging KES 80 billion annually. Out of KES 2 trillion in tax revenue that KRA collects on the largetaxpayers'taxrevenuecontributioninKenya. 2. s s o ne workforce derived in Kenya. In terms of employment, KBL's direct value chain activities provide employment to 45,000 farmers, 180,000 retail trade employees operating in the over 45,0o0 outlets countrywide where they sale products and finished goods transport services employees and 120 local distributors directly employing 2,400 people. 3. 22.KBL invested initsfirstvehicle transportationsystem inI958.The fleetwasvery organized, rising to become one of the best in East Africa until l997, when it began outsourcing logistics services. This was prompted by a change in KBL business strategy and a need to focus on core activities, improving service & cost efficiencies 4. Association (KTA) because no specific issues have been raised directly to KBL by KTA or informalengagementswithKTA. 24. In logistics procurement process, an e-auction was conducted with 25 potential Kenyan registered companies who were invited, 22 of whom participated in the Request for Proposal (RFP) and e-auction. The process of tender evaluation involved a 3-step process of pre-tender engagement, technical (post RFP submission) and commercial (post e-auction analysis) evaluation. This process is embedded in KBL's procurement policy, and it is designed to be independent, transparent, equitable, upholding the highest levels of 6. 25.The technical evaluation was focused on addressing systemic and strategic logistics concerns KBL had been facing within the value chain and to deliver transformational benefits in the form of reducing KBL's carbon footprint. The requirements included: -

• a) Safety and risk management—— onboard cameras, sure locks and mix telematics;

• b) Commitment to reducing carbon footprint, new vehicles with governance on truck ageing and management;
• c) Control tower—— delivering visibility for route planning and optimization to deliver efficienciesthroughtrafficmanagement;

3. different product categories and

• e) City logistics solutions providing adequate trailer capacity, guaranteeing product integrity and security in transit.

26. After a rigorous procurement process, the tender was award to four Kenyan registered companies namely Ponty Pridd, DHL, Agility and Acceler. The process was conducted in a fair and transparent manner in accordance with KBL's procurement policy and applicable laws in Kenya. 27. The MD stated that the participating logistics companies are all locally registered, employing in excess of 21,0o0 Kenyan people and operating with the laws in Kenya. KBL contracting processes are in compliance with all applicable laws in Kenya including the Competition Act 2010.

I.3SUBMISSIONS BY BRITISH AMERICAN TOBACCO (BAT)

• The company is public, having been listed on the Nairobi Securities Exchange since 1969, andhasapproximately5,700shareholders,ofwhich5,500 arelocal.

29. The company's value chain covers business partnerships with over 80,o00 Kenyans, employment opportunities for more than I,800 Kenyans with the Kenya operation having more than 400 employees. Additionally, the company runs a robust twelve-month internshipprogram,currentlywitha cohortof57interns. 30. The MD informed the committee that the company contributes Kshs.93.2 billion to the

andgeneratedforexofoverUSDIo0million.Additionally,BATKenyapaidanannual solatium compensatory contribution required under the Tobacco Control Act, 2007 being 2% of the annual value of tobacco manufactured or imported annually. From the effective date of this levy in 2019, BAT Kenya has paid Ksh481 million.

31. In response to the allegations made against multinationals, the MD stated as follows;

• i. The MNCs engage in exclusive contracts with fellow MNCs in transport and logistics sector:\_BAT Kenya submitted that it does not engage in exclusive contracts for transportserviceswithothermultinationalsasallegedoratall.Thelistofsuppliers o o si r the capabilitiesofeachgroup of suppliers.
• i. subject its local suppliers to anti-competitive pricing as alleged or at all. On the contrary, the Company considers pricing based on what has been offered by the suppliers during the tender process and further negotiations with successful bidders after conclusion of the tender process. Further, it is worth noting that special considerations are also set out in BAT Kenya's contracts with its transport and logistics suppliers giving the parties an opportunity to review and vary the pricing depending on market conditions and changes in the services during the period of the contract e.g. changes triggered by changes in legislationor movements in local fuel prices.

4. iii.

d d a e s aim of driving local transporters out of business, the same is not correct. Predatory pricing by definition is the practice of setting prices for a product/service unrealistically low in order to eliminate the competition. Logistics suppliers are not the Company's competitors neither is the Company a player in the transport and logistics sector. Further, BAT Kenya has mitigated the risk of any supplier employing predatory pricing validated to ensure compliance with the law, alignment with good industry standards

• and ensure supplier sustainability. BAT Kenya does not dictate the prices for its suppliers.FurtheritisintheinterestoftheCompanytohaveawidepoolofsuppliers to encourage good quality goods/service delivery and competitive pricing
• iv. The MNCs contracts with fellow MNCs in the transport sector lack transparency: BAT Kenya has undertaken competitive bidding to ensure that it secures quality services and competitive pricing. The bidding processes and procedures are communicated to all process is undertaken though an online platform to which all bidders have visibility of thebids andaccess toinformation.Thebidding documents andprocessesare communicated to the proposed bidders in advance through the RFP which contains terms and conditions that would eventually form contractual terms with the successful sourcingprocess.

32. In concluding, BAT Kenya submitted that it is transparent in its engagements with its values of conducting business in a responsible and sustainable manner. BAT Kenya has including giving feedback during the regular review meetings with suppliers. No formal or informal complain has been raised by Kenya transporters of association (KTA) to BAT over themattersmentioned.

I.4SUBMISSIONSBYUNILEVERKENYALIMITED

The managing director Unilever Kenya submitted that;

• s e ss i o o e u s suppliers in transport. 3 are locally incorporated entities that are subsidiaries of global companies (all incorporated in Kenya) and 12 local entities that have no global parent companystructure.

34. The 3 locally incorporated entities in warehousing are; E.A.S storage co Ltd, Conventional cargo Conveyors and AGL Kenya Ltd while the 12 suppliers in transport are; Conventional cargo conveyors, Agility logistics Itd, Swan carriers Itd, Simba trucking Itd, Amitruck Itd, Sendy Itd, Ponty Pridd, Expediters Itd, offshore global logistics Itd, Edgescope Itd, Dodoma transport agency Itd, DHL supply chain Kenya Itd and Mearsk. 35. In warehousing, out of the 3 suppliers, 2 are local entities (E.A.S storage ltd and Conventional cargo conveyors) that have no global parent company structure, while I is a local entity (AGL. Kenya Itd) that is a subsidiary of a global company creating over 400 direct jobs forKenyans. 36. In transport, Clearing and Forwarding, out of 13 suppliers, 11 are local entities that have no globalparentcompanystructureand 2 arelocalentities thataresubsidiariesofaGlobal Company. 37. The MD informed the committee that as a standard operating procedure, prior to any onboarding of their logistics suppliers, they undertake a thorough RFQ (Request for terms and conditions. Upon closure of the tender period, they shortlist those suppliers that meet the criteria of the RFQ, schedule interviews/negotiations to agree on specific for, payment terms and other elements touching on the specific engagements.

• 38.Safety,Health,Environment and Security is priority for operations because they endeavor to run safe operations and value life and safety of all stakeholders in the Supply Chain. As such, failure to meet the prerequisite mandatory standards related to Safety automatically disqualifies the potential bidder from proceeding to the next step, however, as a mitigating

factor, they work with the Suppliers to develop their readiness on the areas that fall short for future qualifications.

39. In terms of pricing the MD stated that; they use competitive bidding to determine prices for their logistics services. As part of the contract pricing review mechanism, there is an agreed model to review price based on macro factors e.g. fuel, forex fluctuations and any other macro or micro economic parameter that impacts cost of product or service. Further, in the event of unusual disruptions in the macro environment that has material Sse moe o sou ado ae u a o sns r o a that ensure sustainablebusiness to either of theparties. 40. The MD confirmed to the committee that there were no any formal or informal engagements withKTA.

I.5SUBMISSIONSBYNESTLEKENYALIMITED

The managing director Nestlé Kenya Limited appeared before the committee and submitted as follows:

41. That Nestle is a company that prioritizes compliance with laws and regulations in the region's manufacturing industry since its establishment in 1965. Our well-known brands in Kenya, such as MILO, NESCAFE, and MAGGI seasoning cubes, have become household names. 2. 42.While providing clarity on their selection criteria for transporters withwhom they engage inbusiness,the MDstated that the company choose itstransporters through a tendering system, inviting qualified and interested bidders to bid based on the following criteria:

• i. Capacity and capability to effectively meet the company's transportation requirements.

4. Possession of the appropriate type and quality of vehicles for sensitive food products.

• ili. Abilitytotrackandcontroloperations.
• iv. Compliance with certifications for vehicles and drivers.
• V. Cost competitiveness.

43. Based on these criteria, the company is currently working with local players who provide distribution services in Kenya. These players include Ponty Pridd Holdings and Edge Scope Limited, both of which are fully locally owned small-scale transporter service providers. 44. They were not able to address any specific concerns raised by Kenya Transporters Association (KTA) because no specific issues have been raised directly to Nestlé by KTA. They have also confirmed to the committee that there were no any formal or informal engagements withKTA.

I.6SUBMISSIONS BY THE COMPETITION AUTHORITY OF KENYA (CAK)

The Authority submitted that;

45. It has addressed anti-competitive practices such as abuse of dominance and restrictive agreements in various sectors in enforcing the Act, thus fostering a competitive landscape that benefits consumers and promotes innovation. Additionally. the Authority's oversight of mergers and acquisitions has been instrumental in balancing the interests of market players while also safeguarding public interest. 46. It is the intent of government to enhance support to local investors in the transport and logistics sector to gain the required capacity for increased productivity. lImproved well as create employment opportunities for Kenyans, revenue for the state, poverty reduction, promote value addition, stimulate production and product diversification and encouragegrowthoflocalindustries. 47. The Authority has on various occasions intervened in this sector to protect and enhance Services (GMS) Ltd (GMS) against Maersk Kenya Ltd (Maersk) on alleged abuse of imposed rates at which GMs charged its clients and also imposed a condition that all Controlled Atmosphere (CA) containers should use generators from Maersk. Further, it was alleged that Damco Kenya (Damco) was allocated to handle bookings while GMS' service was limited to transportation only, this allegedly resulted in unfair competition betweentheGMSandDamco.

48. The Authority noted that the issues raised by KTA may be interrogated within the provisions of the Competition Act. In this regard, the Authority, if required, may initiate an investigation into the alleged conduct with an aim of providing evidence-based information s d e ns pe s e and logistics sector. For purposes of the inquiry, the Authority considered two markets that is: 2. a)The provision of Trucking and Cargo Haulage services and; 3. b)The provision of Shipping and Logistics services.

On whether 60% of transport and logistics work should be reserved for local transport companies; The Authority noted that;

49. KTA proposed a quota system where at least 60% of the transport and logistics work is reserved for local transport companies. 50. In view of this request, the Authority notes that section 2l(l) of the Act prohibits undertakings or concerted practices by undertakings that have as their object or effect the prevention, distortion or lessening of competition in trade in any goods or services in Kenya, or a part of Kenya, unless they are exempt in accordance with the provisions of sectionDofPartlloftheAct. 3. 5 1. Specifically, section 21 (3) (b) and 21 (3) (i) prohibits arrangements which divide markets by allocating customers, suppliers, areas or specific types of goods or services and otherwise prevent,distort orrestrictcompetition. 52. It is the Authority's position therefore that KTA's prayer to reserve 60% of transport servicesfor local (Kenyan-owned) firmsundermines the objectof theAct and ifgrantedwill contravenetheprovisionssection2lof theAct.

On whether MNCs secure exclusive agreements with key suppliers or distributors, shutting out small local companies from essential resources and markets?

53. The Authority noted that, in their Petition,KTA alleged that MNCs engage in exclusive agreements withkey suppliers or distributors,shutting out small local companies from essential resources and markets. In support of this allegation, KTA through their letter

dated 8th August 2025, submitted a joint witness statement signed by various members of theAssociation.

54. In the joint statement, the KTA members indicated that the MNCs lock out local players by sourcing the services out of the country, where MNCs operating in Kenya and other developing countries automatically opt for other foreign companies to offer them services, totally discriminating locals. The members further submitted that there is also presence of incentives paid abroad for award of contracts for local business. 55. KTA members further submitted that in 2025, KBL logistics and warehouse contracts were awarded in London. The whole contracting was handled in a very opaque way which was designed to lock out local transport and logistics firms out of KBL. In KBL over 70% of all transport work and lo0% of warehouse work is controlled by MNCs. This saw KBL through Diageo London getting "savings in advance" paid in London by DHIL. and Bollore for over 4 millionpoundsby eachcompany. 56. From the foregoing, KTA's allegations centre on exclusive arrangements by the MNCs. Exclusive agreements occur in a vertical relationship where a buyer is obligated to purchase between suppliers and distributors or manufacturers and retailers. 57. Under the Act, both horizontal (between competitors) and vertical (between different including exclusive distribution arrangements.

On whether MNCs have been engaging in discriminatory practices leading to market foreclosure

58. The Authority submitted that in their Petition, KTA alleged MNCs are engaging in discriminatory practices by favouring large customers with discounts and preferential treatment while putting smaller competitors at a disadvantage. 2. 59.Section 24 (2) (c) of the Act prohibits applying dissimilar conditions to equivalent involves an assessment of whether as between equivalent transactions, there is

• abuse involves any discount, allowance, rebate or credit given or allowed in relation to the well asanon-verticallyintegratedone.
• E0. From the contracts submitted by the MNCs, it has been observed that the contracts and that from the list of trucking companies contracted by the MNCs majority were local companies. As such there was no evidence found to establish that the MNCs were discriminating the local transporters leading to market foreclosure.
• 6 1. Based on the evidence gathered, the Authority did not find the existence of the alleged discriminatory practices by the MNCs that could lead to market foreclosure contrary to section 24(2)(c) of theAct.
• On whether MNCs have been engaging in predatory pricing

62. CAK noted that in their Petition, KTA alleged that MNCs resort to predatory pricing achieved a monopoly. 63. Predatory pricing is an anti-competitive strategy where a dominant company deliberately sets its prices below cost with the intent to eliminate competitors or deter new entrants. Once competitors are driven out and the firm secures or strengthens its dominant position, it may then raise prices to recoup losses—often to the detriment of competition and vertical integration,dominance or market power must be established on the part of the MNCspursuant tosection23 of theAct. 64. The relevant market for KTA's complaint is trucking and cargo haulage services, the MNCs operate in the manufacture of products such as alcoholic beverages, tobacco, fast-moving consumergoods,andcement.Assuch,issuesofdominanceormarketpowerdonotarise in this case, and KTA's allegations of predatory pricing are not applicable.

On whether MNCs have been engaging in anticompetitive agreements specifically price fixing.

65. CAK notes that in the Petition, KTA alleged that MNCs engage in collusive agreements with competitors or suppliers such as price fixing or market allocation schemes to maintain their dominance. 66. The Act requires that each company establish prices and other competitive terms on its own, without agreeing with a competitor. When purchasers make choices about what products and services to buy, they expect that the price has been determined on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is often higher prices. 3. n oiee pe n si uedoo si u aauu sueu au yanoie ues ' services, the MNCs operate in the manufacture of products such as alcoholic beverages, tobacco, fast-moving consumer goods, and cement. Therefore, determining dominance or market power in this context is not viable, and the allgations of price fixing raised by KTA donot arise.

1.6 submissions by coca-cola comPany (Tccc)

The Managing Director Coca-Cola Company (TCCC) submitted that;

68. in Africa, Coca-Cola Beverages Africa (CCBA) is the largest bottler, accounting for about 40% of all Coca-Cola beverage volumes on the continent. In Kenya, Coca-Cola Beverages Kenya (CCBK) serves as the anchor bottler, operating six production sites located in Embakasi, Embakasi-Umoja, Nyeri, Eldoret, Kisumu, and Molo. 69. They have significantly contributed to the country's economic development by fostering robust supply chains in wholesale, retail, and agriculture. The Coca-Cola System generates both direct and indirect employment, with over 4,000 jobs in Kenya. 70. In project Investment, they have driven economic growth and created opportunities across the value chain through investments totaling nearly I9 billion Kenyan Shillings over the past production line, a wastewater treatment facility, and expanded logistics capacity.

71. On Business Sustainability, CCBK actively supports Kenya's socio-economic vision by women in the supply chain have benefited from its initiatives, while the "Nawiri" program has helped nearly80,000MSMEs and retailers grow theirbusinesses. 2. a s programs, directly impacting over 10,615 women, youth, and people with disabilities since 2022. The company also plans to expand its role in water conservation, sports, culture, and youth empowerment initiatives. 73. The MD stated that on Logistics Management, the Coca-Cola System's nationwide distribution model ensures efficient product delivery through over 190,000 outlets across Kenya. CCBK manages a private fleet of nearly 280 vehicles, sourced locally from companies such as Isuzu East Africa, CFAO Kenya, Scania East Africa, and Simba Colt Motors, thereby supporting Kenya's automotive industry. 74. When it comes to Logistics Procurement Process, CCBK emphasizes local sourcing for transport and logistics services to support both inbound raw materials and outbound finished products. Its procurement and tender evaluation processes are grounded in transparency, independence, and integrity, in line with CCBA's procurement policy and Kenyan law.

75. The following defines the high-level procurement process:

• i.Establish a Data-Driven Baseline: Build a factual foundation for the sourcing event usingreal,accuratedata.
• iil. Define Business Requirements: Identify clear objectives for the sourcing event, focusing on practical and achievable outcomes.
• ili. Evaluate the Supply Base: Assess current and potential suppliers, considering technological advancements and new opportunities.
• iv. comparing outcomes to ensure fairness.
• V. Report and Secure Approvals: Present findings and results to stakeholders for review and approval of the proposed path forward.

• relationships and material categories to maximize value in alignment with targeted objectives

76. Supplier Guiding Principles:

• i. Commitmenttohumanrights:Webelieve thatsharedvaluesshould form the
• ii. Compliance with laws and regulations: Suppliers must adhere to all applicable local and national laws, rules, regulations, and requirements in the manufacturing and distributionofproductsandservices.

3. including the use of In-Vehicle Monitoring Systems (IVMS) and ensuring the roadworthinessoftheirvehicles.

• iv. Environmental responsibility:Suppliers must demonstrate a commitment to reducing environmental impact by utilizing newer vehicles and adhering to governance practices related to vehicle aging and management.

77. The agency submitted that Coca-Cola Beverages Kenya (CCBK) embraces a strong local approach by hiring, producing, distributing, and sourcing within Kenya, thereby strengthening the value chainand creating both direct and indirect employment opportunities. The company is committed to competitive and compliant local sourcing of conduct. Beyond business operations, CCBK prioritizes community well-being, ensuring its in which it operates.

1.7 SUBMISSIONS BY GLAXOSMITHKLINE LIMITED (GSK)

TheManagingDirectorsubmittedthat;

• S o s service provider which independently and competitively selects the transport providers who ultimatelydeliverourproductstodistributorswithinKenya.

79. Their products are transported by road to the distributors by use of specialized and dedicated temperature-controlled road vehicles in compliance with the Guidelines and Regulations. The transporters of pharmaceutical products must also ne licensed by the PPB to engage in such business. 80. The MD stated that their domestic distribution model leverages local transporters, with specialized trucks. This model ensures timely deliveries within the country but also supports local transporters are independently selected by the third-party logistics service provider. The third-party providers are:

• i. Jonathan Transporters;
• ii. Fargo Courier Limited; and
• il. Jihan Transporters.

81. On Security Service Providers, the providers engaged by the company are evaluated on the grounds of fair market value, capacity for service delivery, credit terms, security and safety policiesfortheirstaffandconflictsofinterest. 82. The company is guided by the provisions of the Private Security Regulation Act, Cap 207 of the Laws o Kenya in its selection of security service providers. To this end, the security suchasbeinglicensedbythePrivateSecurityRegulationAct. 83. Currently, the company has engaged the following locally registered entities for the provisionofvarioussecurityservices:

• a) G4S Kenya Limited;
• b) Instarect Limited;
• c) Advanta Africa Limited;
• d) Chrome Partners Limited;
• e)PentaConvertersLimited;and

• f)Magre Safekey Limited.

PARTFOUR

4.1COMMITTEEOBSERVATIONS

Basedonthetermsofreference,theCommitteeobserved asfollows-

(a) whether unfair treatment of local transporters by multinational companies has created an unfair business environment;

• KTA submitted that the local investors in the sector of transport, logistics and s e g multinationals, who opt to ignore the local capacity and deal with fellow multinationals. This ground that would allow local participation based on experience, expertise and that local ownership.

85. Further the association submitted that, Multinational companies secure exclusive essential resources and markets. They alleged that Multinational companies favor large customers with discounts and preferential treatment, while putting smaller competitors at a disadvantage.

• 86.In response to these allegations the multinational companies submitted that, they undertaken competitive bidding to ensure that they secure quality services and competitive pricing. The bidding processes and procedures are communicated to all relevant suppliers withclear timelinesforsubmissionofproposals.The entirebiddingprocess isundertaken information. The bidding documents and processes are communicated to the proposed bidders in advance through the RFP which contains terms and conditions that would eventuallyformcontractualtermswiththesuccessfulbidderssubject tofurther formally which is a clear indication of transparency in the sourcing process.

• 87.The multinationalcompanies further submitted thattheydo not engage in exclusive contracts for transport services with other multinationals as alleged or at all. They transact serviceswhileappreciatingthecapabilitiesofeachgroupofsuppliers.

88. They also submitted that they are transparent in their engagements with their suppliers and have been fair in their treatment of the suppliers in recognition of upholding their values of conducting business in a responsible and sustainable manner. They stated that they have 89. The CAK advised that Section 24 (2) (c) of the Act prohibits applying dissimilar conditions undertakinginvolvesanassessmentofwhether asbetweenequivalenttransactions,there is discrimination between trading undertakings in the supply of goods or services. This form of abuse involves anydiscount,allowance,rebate or creditgiven or allowed inrelationtothe well asanon-verticallyintegratedone.

• 90.From the contracts submitted by the MNCs, CAK had observed that the contracts entered from the list of trucking companies contracted by the MNCs majority were local companies. AssuchtherewasnoevidencefoundtoestablishthattheMNCswerediscriminating the local transporters leading to market foreclosure contrary to section 24(2)(c) of the Act.

warehousing, transport and related sectors by multinationals companies;

91. TheKenya Transporters Association submitted that there is limited Local Participation as Multinational companies often outsource logistics and warehousing services abroad, using contracts applicable across their operations. This bypasses local companies and hinders theirabilitytocompete.

92. They also informed the committee that there is Disparity in Investment; Local entrepreneurs own the majority (90%) of trucks in Kenya, while multinational companies contribute only I0%. However, multinational companies secure over 70% of logistics contracts, leaving local investors with limited opportunities and unfair conditions. 93. The association advocated for a quota system, where at least 60% of transport and logistics thisproposal. 94. In responding to allegations, the multinational companies stated that; majority of suppliers contracted are locals and they have ensured that they continue to have a positive social impact in terms of job creation and improving livelihoods as well as improving the local economy through tax contribution across thevalue chain. 95. The Competition Authority of Kenya was of the view that reservation of 60% of transport services for local firms undermines the object of the Act and if granted will contravene the provisions of section 2l of the Competition act. 5. (c) On whether transfer pricing by multinational companies has created an unfair business environment in the provision of transportation and logistics services; 96. The association of local transporters submitted that, in some cases, the multinational companies resort to transfer pricing or even predatory pricing, temporarily lowering prices 97. As regards to this allgation that multinational companies engaging in predatory pricing with the aim of driving local transporters out of business, they stated that the information is not true. 8. a s e s e m proposals from their suppliers and not vice versa. These proposals are scrutinized and validated to ensure compliance with the law, alignment with good industry standards and ensure supplier sustainability. They also don't dictate the prices for their suppliers. Further it is in their interest tohave a wide pool of suppliers to encourage goodquality goods/service delivery and competitive pricing

• terms on its own, without agreeing with a competitor. When purchasers make choices about what products and services to buy, they expect that the price has been determined on the basis of supply and demand, not by an agreement among competitors. When

100. CAK noted that Predatory pricing is an anti-competitive strategy where a dominant deter new entrants. Once competitors are driven out and the firm secures or strengthens its dominant position, it may then raise prices to recoup losses often to the detriment of competition and consumers' welfare. In analysing predatory practices and specifically in this the part of the MNCs pursuant to section 23 of the Act. 101. The relevant market for KTA's complaint is trucking and cargo haulage services, the MNCs operate in the manufacture of products such as alcoholic beverages, tobacco, fastmovingconsumergoods,andcement.As such,there is no commonmarket and issues of dominance or market power do not arise in this case, and KTA's allegations of predatory pricing and price fixing are therefore not applicable. 102. All Multinational companies engaged indicated to the committee that there were no formal or informal engagements with KTA with respect to the matter at hand.

4.2COMMITTEEFINDINGS

BasedontheCommitteeobservationsandsubmissionsreceivedtheCommitteemakesthe following findings: -

Companies

• i.while local transporters raised legitimate concerns about limited access to logistics contracts and perceived preferentialtreatmentofmultinationalpeers,the evidence provided did not substantiate claims of deliberate discrimination or exclusionary conduct by multinational corporations (MNCs);

• ii. The Competition Authority of Kenya (CAK) confirmed that, from its inquiry, the contractual terms offered to both local and foreign suppliers were substantially similar and that a majority of transport service providers contracted by MNCs were, in fact, Kenyan-owned enterprises;
• iii. Accordingly, the Committee finds no evidence of unfair discrimination or market foreclosure contrary to Section 24(2)(c) of the Competition Act, 2010, which prohibits applyingdissimilarconditions to equivalenttransactions.
• iv. Based on the evidence adduced, and from the report by the Competition Authority of Kenya, the Committee finds that no evidence was presented to demonstrate discriminatory conduct, abuse of dominance,transfer pricing, predatory pricing or breach of the Competition Act by the multinational companies operating within Kenya's transport, logistics, and warehousing sectors. The Committee therefore concluded that that the matter did not warrant further action against the multinational companies concerned.

(b) On Compliance with Local Content Requirements in the Warehousing, Transport, and Logistics Sectors

• i. local companies.
• ii. The Competition Authority of Kenya advised that a mandatory reservation of 60% of contracts to local firms in transports and logistics would contravene Section 2l of the Competition Act, as it would distort competitive market dynamics and undermine efficiency objectives.
• ii. TheCommitteethereforefindsthat enforcementofa fixedquota systemwould be inconsistent with prevailing competition laws and Kenya's trade liberalization commitments.

(C) On Transfer Pricing and alleged predatory pricing practices by Multinational Companies

• The CAK clarified that predatory pricing constitutes an abuse of dominance under below cost to eliminate competitors. In this case, since the MNCs operate primarily in manufacturing (e.g., beverages, tobacco, and cement) rather than the transport services market,thequestionof dominancewithin thelogisticssectordidnot arise.
• ii. From the evidence submitted, the Committee finds that the allegations of transfer pricing or predatory pricing were unsubstantiated as no evidence was adduced to support the indication that the MNCs dictated pricing for transport suppliers or engaged in belowcost pricing strategies designed to eliminate competition.
• (d) The Committee also noted the absence of formal engagement between KTA and the MNCs on these concerns prior to presentation of the complaint to the House, underscoring the need and relevantregulatory agencies.

4.3COMMITTEERECOMMENDATION

1. The Committee recommends that the Competition Authority of Kenya (CAK) continue itsmarketsurveillanceroleunderSections21and24of theCompetitionAct,20l0,to practicesacrossthelogisticsandwarehousingsectors.

11a02s

Signature...

.Date..

REPUBLIC OFKENYA THENATIONALASSEMBLY THIRTEENTHPARLIAMENT-FOURTHSESSION-2025

DIRECTORATEOFDEPARTMENTALCOMMITTEES

DEPARTMENTALCOMMITTEEONTRADE,INDUSTRYANDCOOPERATIVES

ADOPTIONSCHEDULE

| No. | MEMBER NAME | SIGNATURE | |-------|-----------------------------------------------|-------------| | I. | Hon.Benard Masaka Shinali,MP-Chairperson | | | 2. | Hon.Kitany Marianne Jebet,MP-Vice Chairperson | | | 3. | Hon.Dr.OundoWilberforce Ojiambo,MP | | | 4. | Hon.Adagala Beatrice Kahai, MP | | | 5. | Hon. Githinji Robert Gichimu, MP | | | 6. | Hon. Kamene Joyce, MP | | | 7. | Hon.Mwalyo Joshua Mbithi Mutua, MP | | | 8. | Hon.Oluoch Anthony Tom, MP | | | 9. | Hon.Guyo Adhe Wario, MP | | | 10. | Hon. Korir Adams Kipsanai, MP | | | I1. | Hon.Maina Mwago Amos, MP | | | 12. | Hon.Sakimba Parashina Samuel,MP | | | 13. | Hon. Alfred Kiprono Mutai, MP | | | 14. | Hon.Michael Wainaina Wambugu, MP | | | 15. | Hon. John Bwire, MP | |