The Competition Authority of Kenya (CAK) has fined Carrefour Kenya Ksh 1.11 billion for abusing its buyer power over Pwani Oil and Woodlands Co. Ltd.
Woodlands is a refined natural bee honey supplier, while Pwani supplies edible oils, fats, skin care products and laundry soap.
“The Authority as pursuant to investigation penalize Majid AI futammi which trades in Kenya under the brand name Carrefour a total of 1,108,327,873.60 for separately abusing its superior bargaining position over two \of its suppliers,” read the statement.
In addition, the retailer has been ordered to amend all its supplier contracts to remove clauses that enable buyer power abuse.
“The supermarket chain is required to amend all its supplier contracts and expunge clauses that facilitate abuse of buyer power,” the CAK said.
Carrefour must refund Pwani Oil and Woodlands Co. Ltd Ksh 16.76 million in rebates deducted from invoices and Ksh 500,000 charged as marketing support.
Woodlands presented a complaint to the Authority in December 2022 alleging that between 2021 and late 2022, the retailer engaged in ABP contrary to section 24A(1) of the Competition Act and that the conduct unfairly reduced its returns and profitability thereby affecting its ability to remain competitive in the market.
“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.”
Carrefour Slapped With Cease and Desist Order Over Pwani Oil
