, NAIROBI, Kenya Jun 3 – Tusker Mattresses Limited (the operator of Tuskys Supermarkets) has been given up to June 30, 2014 to cease managing three branches of Ukwala Supermarket by the Competition Authority of Kenya (CAK), terming it as restrictive behaviour.
Ukwala Supermarkets allowed TML to manage its three branches since March 2013.
The authority has also fined the two supermarkets Sh5.3 million pointing out that the arrangement amounted to a horizontal restrictive practice and contravenes section 21(3) (a) of the Competition Act.
“The authority wishes to highlight that the financial penalty in this case, and in any horizontal restrictive trade practice, is based on the affected turnover, the duration of the conduct and mitigating factors (as presented by the parties),” CAK states in a press statement.
Under the arrangement TML invested Sh200 million putting it in charge of the day-to-day management of the stores.
The arrangement allowed TML to make decisions on acquisition of stock, setting prices, payroll management, staff re-organisation, deployment of technology, rebranding and settling any third party costs of the three stores.
It also allowed TML to set the prices and other trading terms, of a competitor in addition to managing the three stores, in terms of marketing and management systems.
“The parties have thus far complied by paying the same amount to the authority in full and final settlement in respect to the authority’s investigation,” CAK revealed.
The three Ukwala outlets operated by TML are Ronald Ngala, Jogoo Road and Tom Mboya.