The Federal Competition and Consumer Protection Commission (FCCPC) has imposed a $110 million fine on British American Tobacco (BAT) Nigeria and its affiliate companies.
The FCCPC disclosed this via its official Twitter handle stating that the company made numerous violations of the FCCP Act and other regulations.
The management of the commission also asserted that the implicated companies had transgressed both corporate regulations and the National Tobacco Control Act, alongside other legal instruments.
FCCPC also claims the penalty was determined through mutual engagement between the Commission and BAT parties, following the FCCPC’s Cooperation/Assistance Rules & Procedure (CARP), 2021.
What FCCPC is Saying
The Commission said it gathered substantial evidence from forensic analysis of electronic communications and other information/data obtained during the search, as well as other evidence procured during, and after the search from other legitimate sources.
The statement reads in part:
- “Upon full consideration of the record, BAT Parties’ additional articulation, representations and correspondence; totality of evidence procured, violations established under law, BAT Parties’ entry into, and conduct in cooperation and assistance under the Commission’s CAF; the Commission closed the investigation by the Commission and BAT Parties’ mutual execution of a Consent Order and Notice with both parties agreeing that BAT Parties shall pay a penalty of $110,000,000 under and pursuant to Sections 155 of the FCCPA, Clause 11 of the Federal Competition and Consumer Protection Commission’s Administrative Penalties Regulations, 2020 and Clause 4.2 of the Federal Competition and Consumer Protection Commission’s Investigative Cooperation/Assistance Rules and Procedures, 2021.”
The action from the FCCPC also includes a consent order reached between BAT and the commission. As part of an agreement reached per the Consent Order, FCCPC retracted pending criminal charges against BATN and, at least, one employee.
- “In exchange for BAT Parties fulfilling their obligations under the Consent Order, the Commission withdrew pending criminal charges against BATN and at least one employee with respect to obstructing the Commission by attempting to prevent execution of the search warrant and initial lack of cooperation/compliance with steps in the investigation,” FCCPC said.
FCCPC also alleged BAT’s actions impede competitors and impose penalties on retailers ensuring fair opportunities for rival products.
- “That BAT Parties’ shall be subject to a compliance and monitoring under the supervision of the Commission for a period of 24 months to ensure appropriate behavioral and business practices modification to be more consistent with compliance with prevailing competition laws/regulations; and tobacco control efforts.
- “Mandatory public health and tobacco control advocacy in a manner compliant with tobacco control legislation and regulations, and satisfactory to the Commission as mitigation to evidence of a pattern of undermining, and circumventing national tobacco control policies and regulations.
- “BAT Parties shall provide Written Assurances to the Commission pursuant to Section 153 of the FCCPA as required.
BATN was yet to respond to the allegations and the order at the time of this report.
Implications for other foreign-owned companies in Nigeria
The substantial fine levied by the FCCPC on British American Tobacco Nigeria underscores a stringent regulatory stance on corporate compliance with competition and consumer protection laws.
- Critics will argue that the pressure on government agencies to self-fund through revenue generation may motivate the imposition of hefty penalties.
- This inclination could potentially act as a deterrent to foreign direct investment, as companies may perceive the regulatory environment as punitive and unpredictable.
However, such enforcement actions could foster a fairer competitive landscape and safeguard consumer interests, which are fundamental to the long-term health of the market and its attractiveness to investors.
Note: This article was updated to reflect new information.
BAT Nigeria is a NIGERIAN company…
It is of course the Nigerian subsidiary of a foreign company, but it is a NIGERIAN company incorporated under Nigerian law and statutes and registered with Nigeria’s Corporate Affairs Commission as a NIGERIAN company. So, why it BAT Nigeria (not BAT UK), a NIGERIAN company, being fined in foreign currency?!
And we wonder why foreign investors are avoiding Nigeria, and the handful here are stampeding for the exit door, even as our President gallivants across the globe purportedly in search of foreign investment. SMH