Carrefour wins appeal against supplier agreement amendments

A man walks past Carrefour Supermarket at the Junction Mall in Nairobi. [Elvis Ogina,Standard]

 The High Court has upheld the right of Majid Al Futtaim to fair administration, overturning an earlier decision that ordered the company to amend its supplier agreements.

 Majid Al Futtaim, a Dubai-based company, operates the French retailer Carrefour supermarket in Kenya.

The ruling follows a complaint by Orchards Limited to the Competition Authority of Kenya (CAK), accusing Carrefour of abuse of buyer power.

Orchards Limited, a supplier of probiotic yoghurt under the brand name Cool Fresh, alleged that Carrefour had unilaterally delisted it by blocking its supplier code without notice, leaving them with dead stock.

 “The conduct by the appellant amounted to abuse of buyer power. The tribunal was correct in declining to set aside the Authority decision on the appellant’s abuse of buyer power,” Judge Anne Ong’ijo ruled.

In response to the ruling, Carrefour was ordered to refund Orchards Limited Sh289,482 in rebates deducted from its invoices and pay Sh124,768 to the Authority as a penalty for engaging in abuse of buyer power.

Carrefour challenged the Authority’s ruling at the Competition Tribunal, which largely upheld the Authority’s decision in April 2021.

The company further appealed the tribunal’s ruling at the High Court, which upheld one of seven prayers it listed, acknowledging abuse of buyer power clauses in the Orchard-Carrefour contract but rescinding the order to amend contracts with other suppliers.

The Court also held that the other suppliers were not party to the complaint or appeal and should have been joined as parties.

In its response to the ruling, Majid Al Futtaim said, “This essentially upholds the validity of Majid Al Futtaim’s existing suppliers’ agreements. We remain committed to conducting our business with fairness and integrity, working collaboratively with our partners to ensure a sustainable, equitable, and mutually beneficial business environment.”

The retailer has been in operation in the country since 2016.

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