13 September 2017

Kenya: Government Gives Retailers One More Chance to Tighten Self Regulation

Nairobi — The government will give players in the retail sector a chance to come up with self-regulations rules as part of the measures to protect the now vulnerable sector.

In a meeting with industry players, Industrialization Cabinet Secretary Adan Mohammed, however, says the government will be forced to intervene and regulate the sector to prevent further losses if stakeholders fail to self-regulate.

The sector has seen two major supermarkets, namely Uchumi and Nakumatt significantly scale down operations and close some branches due to corporate governance and management issues.

"It is an important sector for us on many fronts and we want to make sure that anything that undermines the development and growth of this sector is addressed," he stated.

Mohammed says the current regulations governing competition and code of conduct are not sufficient enough to handle the dynamics in the retail industry.

Regulations will also include capital structure as well as regulation regarding competition.

"We have realized the kind of laws we have are not competent enough to handle the dynamics of the sector which have come on board. The stakeholders will also come up with regulations specifically to deal with abuse of buyer power which may be happening within the sector, also regulation of the relationship between the supplier and the retailer," said Competition Authority of Kenya Director General Wang'ombe Kariuki.

Kariuki says the government will only enter the market when self-regulation has failed.

Kenya's retail sector has attracted multinational stores that have recently entered the market including Choppies, Massmart and Carrefour.

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