The Competition Authority of Kenya (CAK) has imposed a fine of KShs. 1.1 billion on Carrefour for the “individual abuse of its dominant bargaining position with two of its suppliers.”
Majid Al Futtaim Hypermarkets Ltd operates the Carrefour franchise in Kenya. The affected suppliers are Pwani Oil Products Limited, an FMCG company, and Woodlands Company Limited, a producer of refined natural bee honey.
Carrefour is mandated to reimburse the two companies KShs. 16.76 million in rebates, along with KShs. 500,000 designated as marketing support (Store opening/listing fees).
Buyer Power refers to the capability of a dominant buyer to secure supply terms beyond standard business practices. The regulator revealed that Carrefour imposes three types of non-negotiable rebates, reaching as high as 12%.
The CAK, in a press release, stated that its investigations found that Carrefour compelled its suppliers to provide free products, pay listing fees for each new branch, and station employees at the supermarket’s branches.
Woodlands lodged its complaint in December 2022, followed by Pwani Oil’s separate complaint four months later. In March 2023, the CAK published an order instructing Carrefour to cease charging and collecting rebates from Pwani Oil. In April, Pwani filed a new complaint after Carrefour terminated their commercial relationship.
Carrefour, the eighth-largest retailer globally by revenue, operates in over 30 markets. In East Africa, it has a presence in Kenya and Uganda, with its inaugural Kenyan branch opening in 2016.
