Consumers are most vulnerable in the wholesale and retail sectors where 30 per cent of all cases reported to the Consumer Authority of Kenya (CAK) were recorded.

Consumer-related cases handled by the CAK increased by 28 per cent in the 2021/2022 financial year to stand at 401 up from 314 compared to the previous financial year.

CAK said in its annual report for 2021/2022 financial year that further to reports about the wholesale and retail sectors, the manufacturing and financial services sectors each accounted for a quarter of the cases.

“Going forward, the Authority shall bolster its sensitisation sessions across various mediums. We also commit to continue prioritising investigations into sectors where violations have the potential of harming a majority of Kenyans,” reads the report in part.

Over the period, CAK concluded 90 Abuse of Buyer Power (ABP) cases, a majority (72 per cent) of which were from the insurance sector, relating to complaints by motor vehicle assessors and garages against major insurance firms.

Abuse of Buyer Power refers to a situation where large businesses in powerful bargaining positions exploit this status to their monetary gain and to the detriment of SME suppliers.

In the long run, such conduct depresses the competitiveness of markets through the closure of businesses, limits consumer choice, and triggers an increase in the prices of goods and services.

The retail sector, which until last year, was leading in incidences of ABP, accounted for the second highest quotient of cases at 18 per cent. CAK’s interventions in regards to ABP cases mostly focused on delayed payments, the most prevalent ABP conduct. “While we pledge to continue sensitising stakeholders regarding this relatively new mandate area, we implore businesses and their suppliers to adopt a culture of formalising their supply arrangements through written contracts and enhancing their record-keeping practices,” says the report.

Merger cases

In the period under review, CAK analysed 111 merger cases, representing a 25 per cent increase from the previous year.

According to CAK, the increase in merger cases is mainly attributable to the steady economic rebound and amalgamation of businesses impacted by the Covid-19 pandemic.

Most merger notifications were from the manufacturing sector (23 per cent) followed by finance and insurance (11 per cent), retail (11 per cent), tourism and hospitality (9 per cent), telecommunication (8 per cent), aviation (6 per cent), and real estate (6 per cent) sectors.

In December 2021, the Authority conducted a search and seizure of the premises of 14 steel manufacturers across the country suspected of engaging in anti-competitive conduct such as price fixing and abuse of dominance.

This was one of the 55 restrictive trade practices cases the Authority investigated in the reporting period.

“We anticipate that this investigation, which touches on a key input material in the construction sector will be concluded in the next financial year to the ultimate benefit of consumers,” the report said.

CAK is mandated by the Competition Act No. 12 of 2010 to promote and protect effective competition in markets and prevent unfair and misleading market conduct. In the financial year under review, the Authority penalised undertakings a total of Sh12 million for various infringements of the Act.

The penalties related to undertakings engaging in anti-competitive conduct, breaching consumer welfare provisions, and implementing mergers without the prerequisite approval of the Authority, among others.