Kenya: Retailers Concerned By Competition Authority Ignoring Signed Contracts

20 December 2023
Capital FM (Nairobi)
By Kevin Rotich

Nairobi — The Retail Association of Kenya (Retrak) has protested a decision by the Competition Authority of Kenya (CAK) to fine Carrefour unilaterally Sh1.1 billion.

CAK yesterday slapped the retailer with a record Sh1.1 billion fine for abusing buyer power.

In its investigations, the consumer protection body found that the supermarket chain separately abused its superior bargaining position with Pwani Oil Products Limited and Woodlands Company Limited.

Woodlands processes and supplies retail stores across the country with refined natural bee honey from Kitui County, while Pwani Oil makes and distributes edible oil and fats, skin care products, and washing soap products.

It was also directed that the supermarket amend all its supplier contracts and expunge clauses that facilitate abuse of buyer power, including but not limited to the application of listing fees, the collection of rebates, and the unilateral delisting of suppliers.

"The engagements between suppliers and retailers are intricate, diverse, and unique. In the majority of the cases, they are governed by mutually negotiated and signed Contracts between the Supplier and the Retailer," Retrak said in a statement.

"We are concerned about the direction the Authority has taken in overlooking these contracts," it added.

"We urge for a comprehensive consideration of the dynamics involved including utilizing dispute resolution mechanisms that are embedded in the contracts and fall under the Retail Code of Practice which was created in a bid to promote stakeholder engagement."

Early today, Majid Al Futtaim, the owner of Carrefour in Kenya, said that it was surprised by a fined from the CAK despite the withdrawal of the complaint and the renewed partnership with the aggrieved parties.

"In conclusion, RETRAK emphasizes the importance of a fair and transparent regulatory environment that takes into account the complexities of supplier and retailer relationships," Retrak added.

"We believe that collaboration is essential to finding solutions that support fair competition, uphold consumer interests, and ensure the sustainability of businesses in the retail sector."

Read the original article on Capital FM.

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