Companies

Shoprite cleared in barcode deal row

shoprite

Andrew Mweemba, general manager Shoprite Checkers Kenya Limited during the official opening of Shoprite supermarket outlet at the Garden City on March 21, 2019. PHOTO | DIANA NGILA | NMG

A regional competition watchdog has cleared Shoprite Supermarket of any wrongdoing in deal that compels suppliers to get their bar codes exclusively from GS1 Kenya.

Comesa Competition Commission has ruled that the deal signed by the two firms did not amount to an anti-competitive practice as had been argued by suppliers and other firms offering bar coding services.

The commission has not given a comprehensive reason for the ruling, instead only delivering the final verdict

“The Commission determined that the conduct by Shoprite did not have the effect of preventing, restricting or distorting competition within the common market,” reads the ruling in part.

Both companies would have incurred a financial penalty of up to 10 percent of their annual turnover units earned in the preceding business year had they been found to be in violation of competition laws.

Suppliers and bar code firms such as Barcodes Uganda had in February last year protested to the commission over the agreement that had seen Shoprite turn down products which did not have GS1 barcodes.

The contentious matter was only in reference to Ugandan outlets but it has implications on other seven markets where Shoprite operates.

The outcome means that Shoprite, which has a running agreement with GS1 Kenya, is free to continue compelling suppliers delivering merchandise to obtain barcodes from the GS1.

Shoprite runs about 113 outlets spread out in Kenya, Uganda, Zambia, Eswatini, DRC, Malawi and Madagascar.

Information available on Shoprite Holdings website shows that manufacturers of general merchandise seeking to supply to any Shoprite outlet must register with GS1.

Barcodes Uganda, which sources its bar codes from the International Barcodes Network has been protesting the Shoprite deal saying it is locking out other legitimate sellers.

“To have your goods shelved and sold, you are forced to purchase highly priced GS1 barcodes and incur annual costs to continue using the barcodes,” said the firm.