Is Reckitt Benckiser playing fair in the East African region? The business community raises concerns.

KIGALI, Rwanda: Multinational corporations (MNCs) are often held to high ethical standards, particularly in their dealings with local partners. Yet, recent concerns over Reckitt Benckiser’s pricing, especially in the East African region (including Rwanda), raise questions about whether these standards align with what is expected of them. 

Reckitt Benckiser is the global conglomerate behind brands like Dettol and Lysol. The multinational prides itself on its corporate ethos encapsulated in the slogan: "Do the right thing. Always." 

While this commitment is central to its operations and policies, indications of predatory pricing could affect players in the East African market, casting doubt on whether the company is upholding its principles.

Reckitt Benckiser has been expanding its presence in Africa, although specific regional statistics for East Africa remain sparse. Across the continent, Reckitt's hygiene portfolio has experienced steady growth, fueled by increased demand for health and home care products. The company's global strategy for 2024 emphasizes resilience and market adaptation, even as it faces challenges like competitive pressures and seasonal market shifts.

Talking to various markets, specifically Rwanda and the Democratic Republic of Congo (DRC), members of the business community that Business Insights Africa spoke to, on the condition of anonymity, claim Reckitt Benckiser could be encouraging pricing strategies akin to economic dumping through many of its agents in neighboring countries such as Uganda, Tanzania, and Kenya. Business Insights Africa has also seen documentation that supports these concerns.

“These strategies involve encouraging the trading of Reckitt’s products at significantly reduced prices in particular markets like Rwanda (as compared to the region), creating an uneven playing field that small businesses struggle to compete with,” one trader said.

“Such practices can lead to short-term consumer benefits through lower prices but pose long-term risks, including monopolistic market control and the eventual loss of competition, as the prices used do not accurately reflect the reality of taxes, foreign exchange rates, and consumer indices," another added.

Despite being considered a relatively small market, Rwanda, unlike other East African nations, has emerged as a model for compliance and fair business practices in Africa. The country’s stringent regulation enforcement has been pivotal in fostering investor confidence. However, business stakeholders argue that some multinationals, like Reckitt Benckiser, may view Rwanda's market size as too insignificant to prioritize ethical trade practices.

"While we enforce compliance in Rwanda, predatory pricing tactics originating from regional hubs undermine the growth of our local market. Unfortunately, the parent corporation seems to be encouraging this," another anonymous source commented.Local traders are not the only ones impacted. Rwanda’s initiative to foster a private sector-led economy that supports locally owned and registered companies, which form the backbone of the country’s supply chain, has raised concerns about unfairly and unethically pricing these businesses out of the market. Critical to the region’s sustainable economic growth, these businesses may find it increasingly challenging to survive under such conditions.

Reckitt has continued investing in African consumer health and hygiene innovation, using localized marketing strategies to capture expanding markets. These efforts contribute to steady volume growth in key product categories, despite global and regional demand fluctuations. Reckitt owns the Dettol, Jik, Harpic, Durex, Gaviscon, and Strepsils brands.

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