Rebar rebuke

The Fair Trading Commission (FTC) has disclosed that “another step will be taken” following the publication of an investigation report alleging that Tank-Weld Metals Limited was “likely abusing” its dominance in the local reinforcing steel bar (rebar) market by harming rivals and customers”.

However, Executive Director of the FTC David Miller declined to comment on the actions being contemplated.

“I am not prepared to state at this time what that step is,” Miller told The Gleaner when contacted yesterday.

This comes amid a claim by ARC Manufacturing Limited, the company that filed the complaint against Tank-Weld, that the findings of the FTC investigation “confirm” its assertion.

ARC, which also supplies rebars locally, defended its decision to lodge the complaint, claiming it was done because “the market was not operating on fair terms”.

“The commission’s findings confirm that,” ARC Manufacturing asserted in a public statement on Thursday, hours after the publication of the FTC report.

“ARC expects that the commission will now take steps to address the conduct identified. Pricing below costs to force out competitors is not good business practice. It weakens the market and hurts Jamaica,” it charged.

The 56-page report concluded that Tank-Weld - the leading supplier of steel products in Jamaica, is “likely abusing its dominance in the market by harming rivals and customers”.

The report is based on an investigation conducted by the FTC into allegations by ARC that Tank-Weld was selling rebars below cost to the detriment of rivals.

The FTC is the body established by law to enforce the provisions of Jamaica’s Fair Competition Act (FCA).

The law was enacted in 1993 to help promote market competition and protect consumers by regulating business conduct and preventing anti-competitive business practices and the abuse of dominant positions.

The FTC said Tank-Weld’s alleged conduct was investigated under Sections 19 to 21 of the FCA, which prohibit any action by an enterprise occupying a dominant position in a market from abusing that dominance to the detriment of effective competition.

The report noted that, for several periods between November 2022 and February 2024, Tank-Weld sold rebar at prices that were below acquisition and replacement costs, causing the company to absorb producer-surplus losses.

The FTC said its investigation concluded that Tank-Weld’s pricing strategy causes “injury to customers” by “exerting an upward pressure on prices” and “injures” rivals by increasing their costs through higher financing costs associated with absorbing economic loss.

Tank-Weld has, however, “firmly” rejected the findings, saying “we cannot and will not accept a flawed report built on serious calculation errors and produced without basic fairness”.

“This decision threatens to punish the very company that has invested to achieve great efficiencies and delivered affordable building materials to Jamaicans for decades,” the company told The Gleaner on Thursday in response to the report.

“Our efficiency has helped make construction cheaper for everyone across the island. Tank-Weld will fight this vigorously to protect fair competition and to keep building costs down for the Jamaican people,” it said, adding that the FTC’s findings will be challenged in the Supreme Court.

ARC said it supports Tank-Weld’s right to mount a legal challenge, but expressed the view that the FTC’s process was “thorough and its findings were based on evidence”.

“If Tank-Weld disputes that, the courts are the right place to settle it.”

livern.barrett@gleanerjm.com