The Competition Authority of Kenya (CAK) has welcomed the High Court’s ruling against Carrefour after being found guilty of abusing its buyer power against one of its former suppliers, Orchards Limited.
The judgment, delivered by Justice Anne Ong’injo, directs Majid Al Futtaim hypermarkets operating under Carrefour to refund Kes 289,482 in deducted rebates to Orchards Limited.
Further, Carrefour has been ordered to pay the authority Kes 124,768 as a penalty for such unfair practices.
The case revolves around a contract between Carrefour and Orchards Limited, which supplied probiotic yogurt under Cool Fresh to Carrefour outlets from January 2015 to December 2018.
Orchards Limited, which has since ceased operations, accused Carrefour of several unfair practices that led to its financial difficulties and eventual shutdown.
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The Court upheld the Competition Authority’s determination that Carrefour possessed and abused its buyer power over Orchards Limited.
The court ruled that the hypermarket applied and collected various rebates, including listing fees, which suppliers must pay to have their products stocked in stores.
Carrefour returned goods when their expiration date was approaching, causing significant losses for the supplier.
The high court also agreed with the petitioner that Carrefour refused to accept deliveries of ordered items without providing justifiable reasons, such as inferior quality.
These practices were deemed unfair and detrimental to the supplier, ultimately contributing to Orchards Limited’s closure.
