Competition Authority of Kenya has charged Tuskys and rival Ukwala Supermarkets for price fixing and limiting branch expansion.
The two chains have been slapped with a Sh 5.3 million fine, with the competition watchdog saying they had engaged in a ‘horizontal restrictive’ trade practice when Ukwala allowed Tuskys to manage its stores last year.
A preliminary investigation into the matter, established their arrangement valued at sh 200 million would give more powers to Tusky’s over Ukwala despite the two being major rivals.
The deal sealed last year October was to allow Tuskys manage the Ukwala stores for a period of nine months.
Tuskys was also to make decisions on acquisition of stock, setting prices, payroll management, staff re organization, deployment of technology, rebranding and settling any third party costs of the three stores at Nairobi’s Ronald Ngala, Jogoo road and Tom Mboya branches.
“This practice is in contravention of section 21(3) (a) as read together with (e) of the Competition Act.to the extent that it allowed Tuskys to set the prices and other trading terms, of a competitor in addition to managing the three Ukwala Stores, in terms of marketing and management systems.,” said the Authority.
CAK begun the probe October last year when it emerged sales receipts from Ukwala stores at the CBD were branded with Tuskys logo and phone contacts without its approval.
The charges have been fully settled out of court.