The Competition Authority of Kenya (CAK) has fined Carrefour KShs. 1.1bn for “separately abusing its superior bargaining power over two of its suppliers.”
- The Carrefour franchise in Kenya is operated by Majid Al Futtaim Hypermarkets Ltd.
- The two suppliers in question Pwani Oil Products Limited, an FMCG company, and Woodlands Company Limited, a refined natural bee honey maker.
- Carrefour has also been ordered to refund the two companies KShs. 16.76mn in rebates, and KShs. 500, 000 “that was billed as marketing support (Store opening/listing fees).
Buyer Power is the ability of a powerful buyer to obtain terms of supply outside the scope of normal business practices. Rebates are a refund of a percentage of sale offered by a supplier to its customer. Carrefour “charges its suppliers at least three types of non-negotiable rebates that are as high as 12%,” the regulator said.
According to a press statement, the CAK says that investigations determined that the retailer required its suppliers “…to provide free products and pay listing fees for every new branch opened as well as post employees to the supermarket’s branches.”
- Woodlands presented its complaint in Dec 2022, four months after Pwani Oil filed its own separate complaint.
- In March 2023, CAK gazetted an order “ordering Carrefour to…stop charging and collecting rebates from Pwani Oil…”
- In April, Pwani filed a new complaint after Carrefour terminated their commercial relationship
Carrefour is the eight largest retailer in the world by revenue and is present in more than 30 markets. In East Africa, Carrefour has a presence in Kenya, since 2016, and Uganda.
