Competition Authority Fines Carrefour KSh 1.1b For Abusing Its Buyer Power Over Suppliers

• CAK penalised Majid Al Futtaim Hypermarkets Ltd, which trades under Carrefour, for abusing its superior bargaining power over Pwani Oil Products Limited and Woodlands Limited
• The regulator ordered the supermarket chain to amend all supplier contracts and expunge clauses that facilitate abuse of power
• It also directed Carrefour to refund Woodlands and Pwani Oil a total of KSh 16.75 million in rebates deducted from their invoices

TUKO.co.ke journalist Japhet Ruto brings over eight years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

The Competition Authority of Kenya (CAK) has fined Carrefour Supermarket a whopping KSh 1.1 billion for allegedly abusing its buyer power over suppliers.

CAK penalised Majid Al Futtaim Hypermarkets Ltd, which trades under Carrefour, for abusing its superior bargaining power over Pwani Oil Products Limited and Woodlands Company Limited.

Pwani Oil, founded by Ramesh Malde, Anil Malde and Naresh Malde, is a fast-moving consumer goods company dealing with edible oils, soap and skin-care products.

Woodlands, on the other hand, deals with refined honey.

"The supermarket chain is required to amend all supplier contracts and expunge clauses that facilitate abuse of power, including but not limited to the application of listing fees, collection of rebates and unilateral delisting of suppliers.

The authority has also ordered Carrfour to refund Woodlands and Pwani Oil a total of KSh 16.75 million in rebates deducted from their invoices as well as KSh 500,000 that was billed as marketing support," CAK stated.

Why steel firms were fined

Elsewhere, CAK fined Kenyan billionaire Narendra Raval's steel firm Devki and eight others KSh 338 million for allegedly inflating prices.

The public watchdog noted that the steel companies' move to inflate prices led to a sharp increase in the cost of steel, hurting consumers.

Corrugated Steel Limited was fined the highest amount at KSh 86.9 million, followed by Tononoka Rolling Mills Ltd (KSh 62.7 million) and Devki (KSh 46.3 million).

How much was Royal Mabati fined?

In other news, CAK welcomed the decision by the competition tribunal to uphold a fine imposed on the Royal Mabati factory.

It imposed a fine of KSh 2.65 million on the iron sheet maker over misleading advertisements and communications to customers.

"The ruling confirms the validity of the Authority's May 2020 determination that the rolling material manufacturer had, among other violations, misled its customers regarding timelines for product delivery and treated them unconscionable," read the statement in part.