Supermarkets and other businesses in the retail sector risk fines of up to KSh10 million under a new warning issued by the Competition Authority of Kenya (CAK) over commercial practices that could violate the Competition Act.
In a cautionary notice dated Wednesday, November 11, CAK Director-General David Kemei warned buyers against imposing unfair terms on suppliers, saying the authority had identified ongoing cases of potentially unlawful commercial practices in the retail sector.
“As part of its continued surveillance of the market, the Authority has noted continued instances of commercial terms being imposed on suppliers in the retail sector, in circumstances that may contravene the Competition Act,” the statement read.
The authority said it was monitoring supply agreements involving retailers and suppliers to establish whether some businesses were abusing their stronger bargaining positions.
Commercial Practices Under CAK Scrutiny
CAK identified several practices that could amount to abuse of buyer power, including transferring costs and risks to suppliers, demanding rebates and promotional contributions, extending payment periods and imposing unfavourable terms in joint business plans.
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Other prohibited practices under the Competition Act include delaying payments, unilaterally terminating supply contracts, refusing to receive goods without justification and restricting suppliers from selling to competing buyers.
