CAK Warns Retailers of Ksh10 Million Fines or Jail Over Unfair Supplier Terms

File Image of Kenyans Shopping at a Local Supermarket

The Competition Authority of Kenya (CAK) has warned retailers and other businesses that unfair deals with suppliers carry heavy penalties. Offenders may face a fine of up to Ksh10 million, a prison term of up to five years, or both. The authority issued the warning in a cautionary notice on Wednesday, November 11, 2026.

CAK says it has found repeated cases of retailers imposing harsh terms on suppliers. Practices of concern include delayed payments, demands for rebates and promotional contributions, and the shifting of operating costs onto suppliers. The authority also flagged long payment periods and lopsided joint business plans as possible abuses of buyer power.

"Terms should not be dictated by a buyer merely because it enjoys buyer power," CAK stated. Suppliers must have a real chance to consider, discuss, and negotiate the conditions of their agreements.

CAK also clarified that it has not ordered suppliers to sign joint business plans with retailers. Any such arrangement must be entered into voluntarily. The authority added that signing a supply contract does not prove the terms were fairly negotiated or lawful.

Beyond criminal penalties, CAK may impose an administrative fine of up to 10 per cent of a business's gross annual turnover for the previous financial year. The authority may also order other remedies.

CAK says it will keep monitoring retail practices. Where it finds breaches, it will investigate and take enforcement action against specific retailers.

Suppliers have been urged to keep detailed records. These include draft and signed agreements, joint business plans, correspondence, payment records, and documents showing how terms were negotiated. Suppliers who feel pressured into unfair terms can lodge a complaint with CAK.