ARC Manufacturing Limited has formally filed a complaint with the Fair Trading Commission against its competitor, Tank-Weld Metal, accusing the company of employing “predatory pricing” tactics that constitute an “abuse of dominance” in the steel market. ARC is requesting the FTC to investigate these claims and make a ruling on the matter.
According to the complaint, which was reviewed by the Jamaica Observer, ARC became aware in January 2023 that Tank-Weld was selling rebar, a crucial steel product for construction, in Jamaica at prices significantly lower than their actual cost. ARC, as a rebar importer, estimates that the average supply cost, including insurance and freight, is around $610 per metric ton. After factoring in additional costs such as customs, clearance, and delivery, the ex-warehouse price approaches $677 per metric ton. However, Tank-Weld reportedly sells the same rebar for $650 per metric ton in Jamaica, while charging $750 per metric ton in other Caribbean markets. ARC argues that this pricing strategy indicates predatory intent aimed at eliminating local competitors and manipulating the Jamaican steel market to achieve monopolization.
Tank-Weld currently holds approximately 75% of the steel market, leaving ARC with the remaining 25%. Norman Horne, executive chairman of ARC Manufacturing, emphasized the importance of fair competition, stating, “We believe that in every industry there will always be a dominant player, and nothing is wrong with that. But what is wrong is the abuse of dominance.”
The complaint also points out that other companies have attempted to enter or remain in the market but have been forced to exit due to Tank-Weld’s aggressive pricing strategies. Additionally, Tank-Weld’s control of a wharf in Rio Bueno, Trelawny, is claimed to provide it with competitive advantages over other market players. ARC has requested that the FTC investigate whether Tank-Weld is using the wharf to import goods beyond its licensed permissions.
ARC asserts that it has been losing market share due to Tank-Weld’s pricing tactics, and despite efforts to reduce its own prices, it risks exiting the market without remedial measures. If the FTC finds Tank-Weld guilty of abuse of dominance, ARC plans to pursue legal action for damages, with Horne indicating a readiness to escalate the matter to the Privy Council in London if necessary.
Horne expressed concerns about the broader implications of Tank-Weld’s practices, warning that if ARC is driven out of the steel market, it could lead to similar outcomes in other sectors, potentially harming consumers by allowing Tank-Weld to raise prices unchecked. This situation could adversely affect the construction industry and hinder government development plans across Jamaica.
In January, Horne attempted to initiate dialogue with Tank-Weld regarding its pricing strategy but was unable to reach a satisfactory agreement, prompting the need for an independent investigation. ARC’s attorney, Symone Mayhew, KC, noted that previous complaints against Tank-Weld did not yield adverse findings, and she hopes for a thorough investigation this time around.
In response, Chris Bicknell, CEO of Tank-Weld Metals, stated he had not yet seen the complaint and could not comment on it. He mentioned that similar allegations had been investigated in the past and determined not to breach the Fair Competition Act. Bicknell defended Tank-Weld’s business model, which he claims has contributed to its success and positive community reputation over the past 35 years.
