Carrefour Fined Ksh 1.11 Billion By The Competition Authority

The Competition Authority of Kenya has fined Carrefour Supermarkets 1.11 billion shillings for abuse of buyer power against Pwani Oil & Woodlands Co. Ltd.

Buyer Power is the ability of a buyer to obtain terms of supply more favorable than a supplier’s ordinary contractual terms. This is the influence exerted by an undertaking or group of undertakings in the position of a purchaser of a product or service to obtain from a supplier more favorable terms, or to impose a long-term opportunity cost including harm or withheld benefit which, if carried out, would be significantly disproportionate to any resulting long term cost to the undertaking or group of undertakings.

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Carrefour Supermarket will now also be required to amend all its supplier contracts to expunge clauses that facilitate abuse of buyer power.

The supermarket has also been directed to refund Pwani Oil & Woodlands Co. Ltd 16.76 million shillings worth of rebates which it deducted from invoices as well as Kes 500,000 that it billed as marketing support.

On March 10th, the Competition Authority slapped Carrefour with a cease & desist order about charging rebates on Pwani Oil Products Ltd invoices.

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Here is the statement from the Competition Authority:

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