Competition Authority opposes proposal to reserve 60 per cent of logistics business for Kenyans

The Competition Authority of Kenya (CAK) has strongly opposed a proposal by the Kenya Transporters Association to reserve 60 per cent of the country’s transport and logistics sector for Kenyan-owned companies, arguing that such a move would violate competition laws and amount to illegal market control.

Appearing before the National Assembly’s Committee on Trade, Industry and Cooperatives, CAK Director-General David Kemei told MPs that such a move would go against Section 21 of the Competition Act, which outlaws practices such as market allocation and discrimination.

“The request to ring-fence 60 per cent of transport services for Kenyan-owned businesses runs counter to the objectives of the Competition Act and amounts to an illegal market concentration,” Kemei said.

He maintained that the logistics sector currently lacks a dominant firm and therefore does not meet the threshold that could justify setting aside any portion of the market.

“So, we present to this committee that it will not be the way to go by granting the local firms 60 per cent as requested,” Kemei added.

The Kenya Transporters Association has been pushing Parliament to intervene, accusing multinational companies of sidelining local logistics firms through exclusive commercial deals.

Unfair competition

The association claims these practices have pushed many Kenyan companies to the margins, leading to unfair competition and pricing issues.

In a meeting with the same committee earlier this year, KTA Chairperson Newton Wang’oo said large companies were locking out local transporters in favour of international partners.

He named East African Breweries Limited, Bamburi, and British American Tobacco among those allegedly ignoring local service providers.

In response, the CAK warned that allowing the proposal to pass would set a harmful precedent and interfere with open competition in the sector.

Kemei reminded the MPs that a similar attempt to control the shipping sector through Section 16 of the Merchant Shipping Act had already been overturned by the courts in 2010 for going against constitutional provisions on competition and property rights.

The parliamentary committee has now instructed CAK to expedite its ongoing investigation into the alleged unfair treatment of local transporters.

The probe was triggered by the complaints raised by KTA during their appearance before Parliament last year. Committee Chairperson Benard Shinali said the investigation has taken too long and must be brought to a close.

“We want this investigation concluded as soon as possible. This matter has dragged on for too long without a resolution,” said Shinali.

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Kemei told the committee that while the Authority had planned to finalise the report by October 31, 2025, they would now work to complete it by September 30.

“In view of the public interest and the committee’s request, the Authority will endeavour to conclude the investigation by September 30, 2025,” he said.

The investigation is expected to determine whether the concerns raised by local transporters regarding multinational practices in the logistics sector hold merit and whether any enforcement action is necessary.