The Retail Trade Association of Kenya (Retrak) expressed concerns Tuesday over a recent decision by the Competition Authority of Kenya (CAK) against Carrefour, the French retail chain, saying it could strain relationships between retailers and suppliers.
Retrak said in a statement it is “committed to fostering a conducive environment” for retailers in Kenya, but believes the sanctity of contracts between retailers and suppliers should be upheld.
“The engagements between suppliers and retailers are intricate, diverse, and unique. In the majority of the cases, they are governed by mutually negotiated and signed Contracts between the Supplier and the Retailer,” the trade group said.
The move comes after CAK fined Carrefour KES 1.1 billion accusing it of abuse of buyer power.
Retrak said it was “concerned about the direction the Authority has taken in overlooking these contracts,” and urged regulators to “comprehensively consider the dynamics involved.”
The group warned that the CAK’s decision against Carrefour “overlooks the continuing business relationship between the parties and is likely to strain these relationships.”
“Any regulatory decisions should take into account the careful balance achieved through these contracts, fostering an environment where businesses can thrive and continue to contribute to the growth of the Kenyan economy,” Retrak said.
The trade association also objected to the prospect of “very punitive penalties” against Carrefour, saying such measures could negatively impact not just that company but the wider retail industry in Kenya.
“We encourage a thoughtful review of the potential impact of these sanctions on the retail ecosystem,” Retrak said.
In concluding its statement, Retrak said it remains committed to working with stakeholders “to address concerns, find common ground, and contribute to the growth of the retail industry in Kenya.”
“Collaboration is essential to finding solutions that support fair competition, uphold consumer interests, and ensure the sustainability of businesses in the retail sector,” the trade group said.
The Competition Authority of Kenya said it made the decision against Carrefour to protect suppliers from the abuse of power.
