The Competition Authority of Kenya (CAK) has established that exclusive supply arrangements between manufacturers and various retail outlets are distorting allocation of optimal prices for such commodities and that they end up denying consumers from accessing the commodities at competitive prices.
“The ongoing investigations into unconscionable increases of prices and or hoarding, following pronouncement Coronavirus disease (COVID-19) in Kenya, have established, among others, that some major manufacturers and distributors of essential foodstuffs have entered into exclusive agreements in various parts of the country”, said CAK director general Mr Wang’ombe Kariuki
This situation has been heightened by the COVID-19 pandemic, the competition watchdog noted as it ordered all manufacturers and distributors of maize flour, wheat flour meals, edible oils, rice, sanitizers, and toilet papers to expunge exclusivity clauses in their contracts with immediate effect and not later than 26th March 2020.
The Authority has also asked all manufacturers and distributors to cease and desist from entering into such exclusive agreements unless authorized by CAK and that distributors who also operate their own retail outlets shall avail the essential commodities they distribute, to pass them to other retail outlets on non-discriminatory terms.
CAK has come out strongly in consumer defense on inflated pricing arising out of huge public demand or through artificial shortage. On March 16, the Authority gave Cleanshelf Supermarkets 10 days to provide evidence of refund to consumers who bought the Sh800 per unit sanitizers at Sh1,000.