EDITORIAL: Retail supply code welcome

CAK Director- General Francis Wang’ombe
CAK Director- General Francis Wang’ombe. FILE PHOTO | NMG 

The order by the regulator requiring retailers and manufactures to enter formal commercial relationships with suppliers is welcome.

Many suppliers are at the mercy of retailers and manufacturers because they don't any legally binding contracts regarding the payment period for supplies or recourse for an aggrieved party in case of default.

The Competition Authority of Kenya (CAK) should ensure the code of practice is created and implemented as soon as possible. There should not be a repeat of 2018 when the Ministry of Industry, Trade and Co-operatives brought the players together to create a code of practice only for the document to remain legally unenforceable.

Supermarkets are notorious for breaching the current informally agreed arrangement such as settling supplier debts within 90 days.

Many suppliers have closed shop or run into debt due to delayed payments even as retailers use the money on unplanned expansion or embezzle it.