The Competition Authority of Kenya (CAK) has ordered Carrefour to revise supplier contracts following findings of exploitative practices in a 2020 ruling. The authority identified six contractual clauses that allegedly allowed the French retailer to set ultra-competitive pricing through non-refundable fees and additional rebates demanded from suppliers.
CAK Director-General Wang’ombe Kariuki directed Majid al Futtaim Limited, Carrefour’s franchise operator in Kenya, to remove the disputed provisions within 60 days. The clauses included requirements for suppliers to station staff at outlets and provisions allowing Carrefour to reject delivered goods without justification, according to the regulator’s order.
Failure to comply could result in fines equal to 10% of Carrefour’s Sh14 billion 2018 sales. The retailer previously paid Sh124,767 in penalties for terminating a contract with yoghurt supplier Orchards Limited, equivalent to 10% of its 2018 dairy sales. CAK investigations stemmed from complaints by Orchards, which alleged unfair contract termination.
Carrefour faces additional restrictions, including bans on unilaterally delisting suppliers and requiring merchandising attendants for 12 hours weekly per store. Suppliers argue these terms disadvantage smaller businesses unable to meet financial demands. The retailer defended its practices, stating such terms are standard in global retail, but CAK emphasized they create an uneven playing field for local firms.
Since launching in Kenya in 2016, Carrefour has expanded rapidly, attracting middle-class consumers while local competitors like Nakumatt and Uchumi faced challenges. The retailer’s practices include offering refunds if shoppers find cheaper alternatives at Tuskys or Naivas, its local rivals.
