The Competition Authority of Kenya has ordered Carrefour Kenya to stop deducting rebates from the invoices for Pwani Oil items.
A supplier rebate is money given back to customers to incentivise qualifying purchases. Suppliers offer them to win business or secure further sales.
On the other hand, buyer power is the ability of a buyer to obtain terms of supply more favourable than a supplier’s ordinary contractual terms.
“The Competition Authority issues a cease and desist order against Majid Al Futtaim Hypermarkets Limited directing it to, with immediate effect, cease and desist from charging rebates on Pwani Oil Products Limited invoices until the ongoing investigations on alleged abuse of buyer power by Majid Al Futtaim Hypermarkets Limited are completed,” said CAK acting Director-General Adano Wario published in a Gazette Notice.
The Competition Act defines buyer power as “the influence exerted by an undertaking or group of undertakings in the position of a purchaser of a product or service to obtain from a supplier more favourable terms, or to impose a long-term opportunity cost including harm or withheld benefit which, if carried out, would be significantly disproportionate to any resulting long term cost to the undertaking or group of undertakings.”
In 2021, the retailer was ordered to revise all its agreements with some 700 suppliers within a month after a tribunal found it had been exploiting traders.
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