FCCPC Slaps BAT with Record $110M Fine Over Tobacco Law Breach

Infostride News reports that the Federal Competition and Consumer Protection Commission (FCCPC) has recently imposed a substantial $110 million fine on British American Tobacco (BAT) Nigeria and its affiliated companies, marking a significant development in the realm of corporate compliance with competition and consumer protection laws in Nigeria.

The FCCPC took to its official Twitter handle to make the announcement, revealing that BAT Nigeria had committed multiple violations of the FCCP Act and other pertinent regulations. According to the commission’s management, these infractions extended beyond corporate regulations, encompassing breaches of the National Tobacco Control Act and other legal instruments.

In a bid to shed light on the determination of the penalty, the FCCPC emphasized that the fine was the result of collaborative efforts between the Commission and BAT parties. This collaboration was conducted in accordance with the FCCPC’s Cooperation/Assistance Rules & Procedure (CARP), 2021.

The commission asserted that it gathered substantial evidence through forensic analysis of electronic communications, as well as information and data obtained during searches. Additionally, evidence procured from other legitimate sources, both during and after the search, contributed to the establishment of the violations committed by BAT Nigeria and its affiliated companies.

The statement issued by the FCCPC highlighted the comprehensive process leading to the imposition of the fine. It stated:

“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.”

As part of the FCCPC’s action, a consent order was reached between BAT and the commission. This agreement led to the withdrawal of pending criminal charges against BAT Nigeria and at least one employee. The charges were related to obstructing the Commission and initial non-compliance with the investigation.

Furthermore, the FCCPC alleged that BAT’s actions impeded competitors and imposed penalties on retailers, hindering fair opportunities for rival products. To address these concerns, the commission outlined specific measures, including subjecting BAT Parties to compliance and monitoring under its supervision for a period of 24 months. This is aimed at ensuring appropriate behavioral and business practices modification consistent with compliance with prevailing competition laws/regulations and tobacco control efforts.

Additionally, BAT Parties are obligated to engage in mandatory public health and tobacco control advocacy, aligning with tobacco control legislation and regulations. This serves as a mitigation strategy to address evidence of a pattern of undermining and circumventing national tobacco control policies and regulations. BAT Nigeria, at the time of this report, had not responded to the allegations and the order issued by the FCCPC.

The imposition of this substantial fine on British American Tobacco Nigeria by the FCCPC has broader implications for other foreign-owned companies operating in Nigeria. It underscores a stringent regulatory stance on corporate compliance with competition and consumer protection laws. Critics may argue that the pressure on government agencies to self-fund through revenue generation could motivate the imposition of hefty penalties. This inclination might be perceived by companies as a potential deterrent to foreign direct investment, as the regulatory environment could be seen as punitive and unpredictable.

However, from another perspective, such enforcement actions can be viewed as essential in fostering a fairer competitive landscape and safeguarding consumer interests. These elements are fundamental to the long-term health of the market and contribute to its attractiveness to investors. While the immediate impact on foreign direct investment remains to be seen, the FCCPC’s actions signal a commitment to upholding regulatory standards and ensuring compliance within the business environment in Nigeria.