Carrefour on the spot for forcing discounts from suppliers to dominate the market

 

Carrefour, the French supermarket franchise photo

Carrefour, the French supermarket franchise owned by Majid Al Futtaim Hypermarkets Limited has been given 30 days by the Competition Tribunal to amend hundreds of contracts with its suppliers.

This comes barely a month after the retailer was fined 1.75 million euros (Sh222.5 million) by the Paris Commerce Court over unfair practices, a trend that is now reported in Kenya.

The French-based retail giant, Carrefour has been directed to refund local supplier discounts forced on its products in an 'abuse of buyer power' case.

The retailer has lost an appeal at the Competition Tribunal, where the Competition Authority of Kenya(CAK) and yoghurt supplier, Orchards Limited were respondents.


Orchards Limited moved to the competition authority over-exploitation by Majid Al Futtaim Hypermarkets Limited alias Carrefour,  cited pushing anti-competitive pricing to boost sales and increase its market share.

This includes forcing huge discounts on products to dominate the market.

The retailer is implicated in pushing suppliers for discounts during annual contract agreements, payment of Sh50,000 as a listing fee for every product supplied and forcing suppliers to post their staff at its outlets at their expense.

It is also on the spot for refusing goods already delivered.

Orchards Limited has been supplying the retailer with its yoghurt products.

At the end of January 2019, Carrefour is reported to have unilaterally delisted the supplier without notice.


“There was no provision in the contract allowing for this kind of returns and neither had the supplier been pre-warned about such action,” the Tribunal notes in its ruling.

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