Kenya’s Competition Authority has fined Carrefour Sh1.1 billion for abusing its ability to set terms for suppliers.
“The supermarket chain is required to amend all its supplier contracts and expunge clauses that facilitate abuse of buyer power,” the anti-trust regulator said.
The authority said the retailer was slapped with the fine for abusing its superior bargaining power over two of its suppliers; Pwani Oil Products and Woodlands Company.
Woodlands is a refined natural bee honey supplier while Pwani supplies edible oils, fats, skin care products and laundry soap.
The retailer has also been ordered to refund Sh16.7 million in alleged irregular rebates and amend all clauses in its contracts that facilitate abuse of buyer power.
Rebates are a refund of a percentage of sales offered by a supplier to its customer.
“The complainant provided various evidentiary information to support its allegations. including annual supply agreements, invoices, records of rebates deducted, and records of supplies to other leading retailers,” CAK said.
“Upon assessing the documentation, the Authority issued a notice of investigation to Carrefour and invited them, or their legal representatives, to respond to Woodland’s allegations.”
Woodlands filed a complaint with the Authority in December 2022, claiming that the retailer engaged in ABP between 2021 and late 2022, in violation of section 24A(1) of the Competition Act.
The complainant claimed that the conduct unfairly reduced its returns and profitability, which in turn affected its ability to compete in the market.
Woodlands explicitly claimed that Carrefour subtracted a number of taxes and rebates, including set rebates of 11.5% in 2022 and 12% in 2021, from its invoices for the products it supplied.
The company also claimed that it was forced to post employees’ work at Carrefour, including conducting overnight stocktakes.
