Carrefour’s franchisee in Kenya, the United Arab Emirates-based Majid al Futtaim has announced intention to appeal against the Sh1.1 billion penalty imposed by the competition authority for alleged abuse of buying power.

The Competition Authority of Kenya penalty stems from concerns that Carrefour misused its buyer power in transactions involving Pwani Oil Ltd and Woodlands Ltd.

Despite the hefty fine, Carrefour Kenya remains steadfast in its decision to contest the regulatory action. The supermarket chain asserts that it will pursue the appeal process, aiming to overturn or mitigate the financial implications of the penalty.

“Majid Al Futtain has confidence in the fairness and integrity of its business practises and is appealing the Competition Authority’s decision,” the parent company of Carrefour Kenya said.

The Sh1.1 billion fine constitutes about 2 per cent of Carrefour Kenya’s annual revenue, which stands at Sh46 billion, as reported in filings by its parent company, Majid Al Futtaim. In response to the regulator’s decision, Retail Traders Association has voiced its support for Carrefour Kenya.

Fine is excessive

The industry lobby group contends that the fine is disproportionately high, considering the circumstances surrounding the alleged abuse of buyer power.

It argues the fine is excessive and may have far-reaching implications for the industry. We are troubled by the prospect of very punitive penalties being imposed on one of the retailers,” it said.

The lobby group also said the deal between the suppliers and Carrefour was consensual and the regulator should not have interfered.

The regulatory body maintains that the penalty is justified based on the alleged misconduct in the dealings with Pwani Oil and Woodlands.