by Mohamed Ahmed
The Oriental Weavers Company plans to raise a grievance with influential quarters, including the cabinet, against the Egyptian Competition Authority’s (ECA) accusations Monday of monopolisation.
The ECA’s issued decision accused the company of monopolistic practices and referred it to the general prosecution, according to statements by Oriental Weavers’ Chairman, Salah Abdel Aziz, to Daily News Egypt.
According to Abdel Aziz, the company will submit documents to the Prosecutor General that refute the accusations against them. He added that the ECA report, accusing the company of controlling 90% of the mechanical carpet market during the inspection period, contradicts the latest reports by the Central Agency for Public Mobilization and Statistics (CAPMAS).
The CAPMAS report, according to Abdel Aziz, stated that Oriental Weavers has only 58% of sales, while 25% of the market sales went to imported carpets, in addition to 17% to other local producers.
Mona El-Garf, ECA Chairperson, said in a press statement that the Board of Directors voted unanimously agreeing on the breaches committed by Oriental Weavers group.
El-Garf added that the ECA study proved that Oriental Weavers had made exclusive agreements with a number of mechanical carpet distributors not to distribute the products of any other competing companies. This, in turn, deprives rival companies from distributing their products freely in the market. She explained that this violates Article 8, Clause C of the Protection of Competition Law.
Abdel Aziz defended his company, saying that Oriental Weavers had agreements with local distributors before the competition protection law was issued in 2005. According to Abdel Aziz, the company’s sales strategy changed following the adoption of the law, and that the recent contracts signed with distributors in 2012, did not include this item.
He added that the local market has yet to become the main outlet for the sale of Oriental Weavers products in order for the company to seek a monopoly. The company is successfully marketing 65% of its production in foreign markets.
Abdel Aziz also questioned the reasons behind the decision against the company being taken at this time. The company is currently pressing complaints to the Customs Authority regarding the smuggling of large quantities of carpets to Egypt, amounting to approximately 680m sqm last year.
The law for competition protection had seen amendments in 2014, adding a fine of EGP 300m against monopolistic practices.
The price of the Oriental Weavers Company’s share dropped by 2.5% on Wednesday to reach EGP 9.75