(3 Minutes Read)
Kenya’s competition watchdog has imposed a record US$7.1m (£5.6m) fine on the local Carrefour franchise holder, Majid al Futtaim. This is on account of allegations of coercing suppliers into accepting reduced prices
Kenya’s competition watchdog has imposed a record US$7.1m (£5.6m) fine on the local Carrefour franchise holder, Majid al Futtaim. This is on account of allegations of coercing suppliers into accepting reduced prices.
The regulator accused the retail giant of leveraging its dominant negotiating position against two suppliers, resulting in the highest-ever penalty issued by the competition authority.
In addition to the monetary penalty, the Competition Authority of Kenya (CAK) has mandated the Carrefour franchise holder to reimburse two companies – Woodlands, a honey processor, and Pwani Oil, a manufacturer – with US$112,000.
CAK claims that Majid al Futtaim compelled suppliers to accept lower prices through a rebate system, reducing final payments by up to 12%. The regulator further alleged that the supermarket chain unlawfully shifted its expenses onto suppliers, stating that suppliers were obliged to provide complimentary products, pay listing fees for new branches, and assign staff to the supermarket’s outlets.
This development follows a 2021 ruling by Kenya’s Competition Tribunal (CT), which found the Carrefour franchise guilty of exploiting suppliers by compelling them to accept reduced prices through high listing fees and rebate rates.
Read Also:
https://trendsnafrica.com/carrefour-kenya-told-to-amend-supplier-contracts/
https://trendsnafrica.com/carrefour-opens-a-new-outlet-in-kenya/
Despite the ongoing silence from Majid al-Futtaim regarding the recent penalty, the company had previously asserted its commitment to fostering mutually beneficial relationships with suppliers after the 2021 investigation. Kenya currently hosts 21 Carrefour outlets across various major cities.
