Sachet Water Price Increase: Why Ghana Urgently Needs a Competition Law to Address Price Fixing and Cartel Conduct
The National Association of Sachet and Packaged Water Producers (NASPAWAP) has announced a significant price hike for sachet water, effective Monday, April 6, 2026. The new structure sets the ex-factory price at GH¢8 per bag (30 sachets of 500ml), ex-truck at GH¢10, and a recommended maximum retail price of GH¢15. The association cites rising costs of polymers and global supply disruptions, exacerbated by conflicts in the Middle East.
While businesses face genuine cost pressures in a liberalized economy, this collective announcement raises serious concerns about coordinated pricing that undermines competition and harms consumers. Free-market principles allow individual firms to set prices based on their costs, efficiencies, and strategies. When an association like the NASPAWAP issues uniform “recommended” prices across the board, it risks crossing into anti-competitive territory. There is nothing wrong with a company to increase it prices. We have moved from the era of price control.
Competition Drives Efficiency and Consumer Welfare
In a truly competitive market, prices reflect individual firm efficiencies, sourcing strategies, and innovation. Not all sachet water producers source their raw materials (polymers) from the Middle East. Indeed, some import from the US, Brazil, Russia, India, China, Nigeria, or elsewhere, and larger or more efficient players (e.g., those with advanced technology) can absorb costs better and still offer lower prices. A uniform price floor or guideline, even if framed as “recommended,” discourages price competition and punishes efficient producers while shielding less efficient ones. This leads to higher prices for consumers and reduced incentives for innovation.
Sachet water is an essential commodity for millions of Ghanaians, especially in urban and low-income areas where it serves as a primary safe drinking water source. With most of the drinking sources of water becoming victims of Galamsey, sachet and bottled water come to the rescue of Ghanaians. The collective decision to increase prices disproportionately burdens households.
Contrast this with Ghana’s downstream petroleum sector. After deregulation, Oil Marketing Companies (OMCs) engage in active price competition. Firms differentiate through pricing, promotions, and efficiency, leading to consumer benefits during favorable market conditions (e.g., price wars and adjustments based on individual costs rather than association dictates).
Without robust competition oversight, associations in essential sectors can inadvertently or deliberately facilitate cartel-like behavior by coordinating actions that fix or stabilize prices, reducing output and harming welfare. Historical economic analysis shows cartels often impose overcharges of around 20-25% on average, with significant GDP-level impacts in affected markets.
Freedom of Association vs. Protection Against Collusion
The1992 Constitution protects freedom of association, allowing businesses to form groups like NASPAWAP or others for legitimate advocacy and lobbying. Adam Smith warned in The Wealth of Nations (1776) that “people of the same trade seldom meet together… but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
When associations move from advocacy to coordinating prices or output, it becomes problematic. Ghana currently lacks a comprehensive competition law. Only the petroleum downstream sector has explicit prohibitions on cartelization and price-fixing under the National Petroleum Authority Act (Sections 43-44). Technically, there is no in Ghana that can criminalize the actions of the NASPAWAP. Article 19(11) of the 1992 Constitution provides that: “a person shall not be convicted of a criminal offence unless the offence is defined and the penalty for it is prescribed in a written law.” In the absence of criminalization of price fixing, the government can rely on moral suasion to engage the association.
This legal vacuum leaves consumers exposed. Businesses in sachet water, cement, or other sectors can fix prices with limited recourse, unlike in mature competition regimes where such conduct attracts fines, cease-and-desist orders, or prosecutions. This is where Ghana is missing out. The absence of the law has led to some business associations conspiring against consumers.
Why the Government Must Step in and What It Can Do?
Even in a free market, the state has a duty to prevent market failures like collusion that harm public welfare. Sachet water’s essential nature justifies intervention to protect consumers without stifling legitimate business.
The Ministry of Trade, Agribusiness and Industry (MOTAI) and the Attorney General should engage NASPAWAP immediately and demand the withdrawal of any directive that imposes uniform pricing. Firms must be allowed to set prices independently. Consumers must benefit from competition. Some brands of sachet water can be sold for GHC 10, some for GHC 12. There is no point for the association to suggest prices at which members should retail their products.
Again, the government, through the MOTAI and AG, can convene urgent stakeholder dialogues with producers to encourage deferral of the increase while costs are independently verified, as well as consideration of alternative raw material sourcing markets.
The Solution Is Competition Law
Business associations play valuable roles, but unchecked coordination can conspire against consumers. A free-market economy thrives when competition drives prices and quality of goods and services, and not the agreement to fix prices or restrict the quantity of goods. The sachet water price announcement highlights the urgent need to fast-track the passage of a competition and consumer protection framework in the country.
Enacting this law would prohibit cartels, price-fixing, and other anti-competitive agreements and establish an independent authority to investigate, enforce, and impose remedies. It would also empower consumers and smaller businesses while allowing legitimate associations to advocate without crossing into collusion, and also boost investor confidence by signaling a rules-based market economy.
NB: The writer is an economist, a lawyer, and a public policy expert. He is the Director of the West Africa Regional Centre of CUTS International. He can be contacted via email: apa@cuts.org or www.cuts-accra.org.
