Owners of supermarkets will no longer have a free hand in delisting suppliers following the establishment of new rules that prohibit retailers from engaging in unfair trading practices.
The new rules — set to be signed Thursday between the Ministry of Industry and Trade in collaboration with Kenya Association of Manufacturers, Association of Kenya Suppliers and the Retail Trade Association of Kenya — will give suppliers sufficient time to negotiate with retailers on how and when the two parties should engage or part ways.
The move comes in the wake of mounting retail sector debts that topped Sh40 billion as at December 2017 amid industry turbulence that has left former retail chain giants such as Uchumi and Nakumatt on the verge of collapse.
In the proposed rules, set to be operational within 30 days of signing, supermarkets will not delist a supplier without providing notice.
“Reasonable notice will include providing the supplier with sufficient time to have the decision to de-list reviewed by senior management of the respective supermarket,” reads the retail code of practice and regulation.
The new rules, however, do not give a timeframe within which retailers should pay once goods are delivered — an issue that was a major bone of contention for suppliers in the past.
The rules had initially capped payment terms for fast moving consumer goods to 30 days from the date of monthly statement, but the clause is no longer in the final document.
The new rules comes barely a month after Competition Authority of Kenya (CAK) established a Buyer Power Department to address mounting concerns over the negative influence that businesses have had over suppliers.