Competition Authority fines Carrefour Sh1.1 billion for abuse of buyer power

NAIROBI, Kenya, Dec 19 – The Competition Authority of Kenya (CAK) has fined Carrefour Sh1.1 billion for abuse of buyer power.

An inquiry by the Authority found that the supermarket chain separately abused its superior bargaining position with Pwani Oil Products Limited and Woodlands Company Limited.

Whereas Woodlands processes and supplies retail stores across the country with refined natural bee honey from Kitui County, Pwani Oil makes and distributes Fast-Moving Consumer Goods, including edible oil and fats, skin care products, and washing soap products.

CAK has also directed the supermarket to amend all its supplier contracts and expunge clauses that facilitate abuse of buyer power, including but not limited to application of listing fees, collection of rebates, and unilateral delisting of suppliers.

“The Authority has pursuant to investigations penalized Majid Al Futtaim Hypermarkets Limited, which trades in Kenya under the brand name Carrefour, a total of Ksh. 1,108,327,873.60 for separately abusing its superior bargaining position over two of its suppliers – Pwani Oil Products Limited and Woodlands Company Limited,” CAK said in a statement.

According to CAK, buyer power refers to the ability of a powerful buyer to obtain terms of supply outside the scope of normal business practices or that are disproportionate, unfair, and detrimental to a supplier, or unrelated to the objective of a supply contract.

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