Dominant supermarkets in Kenya will face keener perusal in their operations. The trade principal secretary, Chris Kiptoo, said that the government intends to protect suppliers from exploitation from these supermarkets.
Yesterday, the National Trade Policy was launched, which will help regulate the retail businesses in Kenya, inclusive of giving guidelines on access to trade information and unfair competition. It also aims at empowering smaller retailers who have been dominated by these dominant supermarkets over a long period of time, especially in small towns and estates.
Accourding to Dr. Kiptoo, dominance in the retail segment has birthed an unfair environment for smaller suppliers, thus causing debt crisis by retailers such as Uchumi debt crisis. Uchumi has been surviving on government bailouts and suppliers’ goodwill. and the very recent Nakumatt, on the other hand, has been recently encountering a serious debt crisis that is affecting an extensive chain of traders.
“We had allowed them to self-regulate but that has failed and that is why we have retailers owing suppliers up to Sh48 billion now and because it is attributed largely to one retailer, many suppliers are affected at the same time,” said Mr Kiptoo.
A statement in the policy reads, “The large supermarkets are setting up branches in small towns and as a result of their bulk procurement they receive substantial trade discounts that enable them to offer lower prices leading to unfair competition with the small-scale retailers.”
Phyllis Wakiaga, CEO of Kenya Association of Manufacturers said that the prescription ‘Buy Kenya, build Kenya’ will greatly employ the policy, hence motivating the local industries in Kenya. “This far we have reached is commendable and I only hope that we get to the critical phase which is implementation and we remain passionate in driving these policies that will transform trade in Kenya,” she said.
Written by Collins Gathogo