French retailer Carrefour is on a mission to bar its competitors in the retail sector from setting up business in prime locations within Nairobi where it has outlets.
In an application to the Competition Authority of Kenya (CAK), the retailer wants to lock out its rivals from having access through tenancy at the up-market mall in Karen, The Hub, where it has an outlet and at the Two Rivers Mall.
In a notice published in Friday’s edition of the Kenya Gazette, Carrefour has sought the nod from the competition watchdog to bar the entry of any new food outlet in the malls for the next 19 years or any other supermarket or hypermarkets for six years.
The application, if approved, would keep at bay other local supermarket chains that may be eyeing space in the high-end shopping complexes. It would also lock out other businesses, including butcheries, greengrocers, and fruit vendors from the malls.
Though CAK has given an indication that it may not approve the request, although it can still make an exemption under the law.
“The aforementioned clauses are in contravention of sections of the Competition Act unless an exemption is granted under section 25(1), hence the application,” said CAK Director-General Kariuki Wang’ombe.
Carrefour has been on an aggressive expansion drive, having recently snapped up space vacated by troubled retailer Nakumatt at the Thika Road Mall (TRM) and The Junction Mall. Karen Waterfront, which recently signed up the Game Stores as its anchor tenant, said it did not approve of monopolization of the retail market.
Read: Rivalry or Not, Carrefour seeks protection from competition
“We believe the careful evaluation of tenancy mix ensures that all retailers thrive in the new mall, which ultimately benefits the landlord,” said the mall’s development manager, Freda Rutere-Mbugua.
Carrefour has also stirred up controversy among local suppliers over its stringent contract award system that has locked out most of them. Through its standard contract in the US and Europe, the retailer charges extra fees known as pay-to-stay and listing fees, which are used to gauge a supplier’s seriousness. The money also acts as security to the supermarket in case a supplier’s product fails to sell.