“Pursuant to Sections 24A(2) and 31(4)(a) of the Act, the Authority is requesting local suppliers owed by major retail supermarkets beyond the credit period of 90 days from the supply to submit information to the Authority,” reads an excerpt of the statement sent out by the CAK.
The latest directive came after the state corporation noticed a withholding of payments owed to suppliers, a direct contravention of the Competition Act No. 12 of 2010.
Competition Authority of Kenya (CAK) director-general, Francis Wang’ombe.
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“The authority has commenced investigations into possible contraventions of the Act in the retail sector through delays in payment of suppliers without justifiable reason,” the statement further reads.
All the local suppliers seeking an audience over unpaid dues falling under the laid out terms were further urged to submit all the requisite information to the CAK by May 14, 2020, via the email – [email protected]
Buyer Power
CAK defines buyer power as the ability of a buyer to obtain terms of supply more favourable than a supplier’s ordinary contractual terms.
In other words, it means the influence exerted by an undertaking or group of undertakings in the position of a purchaser of a product or service to obtain more favourable terms from a supplier.
Back in November 2018, Wang’ombe, warned supermarkets and other retail outlets who failed to pay their suppliers on time of possible consequences including jail time.
He went on to establish a Buyer Power Department to address the growing concerns among suppliers on how retail entities were using their influence to their advantage, with little regard to the negative influence such actions would have on the suppliers.
“Following the amendment of the Competition Act No.12 of 2010 to accommodate emerging concerns in the economy, the government has created a Buyer Power Department within the Competition Authority of Kenya (CAK),” the regulator’s statement issued on November 29, 2018, reads in part.
DG Wang’ombe made it clear that the new unit’s key task would be to ensure that the infamous collapse of Uchumi and Nakumatt supermarkets would not be repeated.
A nearly empty shelf in a Nairobi supermarket pictured on Friday, March 13, 2020.
