In a notice released on Wednesday, November 11, 2026, the Authority raised concerns over businesses allegedly using their stronger bargaining positions to impose unfavourable conditions on suppliers.
CAK said its market surveillance had identified several practices in the retail industry that could violate the Competition Act. These include forcing suppliers to shoulder operational expenses and business risks, demanding rebates and promotional contributions, and delaying payments beyond agreed periods.
The regulator explained that such conduct could amount to Abuse of Buyer Power (ABP), which occurs when a buyer exploits its superior negotiating position to impose unreasonable conditions on a supplier.
Other prohibited practices include terminating supply contracts without proper justification, threatening to end agreements unilaterally and refusing to receive goods contrary to contractual obligations.
The Authority also cautioned buyers against demanding preferential commercial terms that disadvantage suppliers or restricting them from supplying competing businesses.
CAK emphasised that supply agreements should be reached through genuine negotiations and mutual understanding rather than dictated by retailers simply because they have greater financial or market influence.
It further clarified that although it encourages written supply agreements, it has never directed suppliers to sign joint business plans with retailers. Such arrangements must remain voluntary, and signing a contract does not automatically establish that its terms were fairly negotiated or are legally acceptable.
The regulator announced that it was increasing surveillance of the retail sector to establish whether the reported practices amount to violations of competition laws. Businesses found to have breached the law could face investigations and enforcement action.
Under the Competition Act, companies found guilty of abusing buyer power risk a criminal fine of up to Ksh10 million, imprisonment for a maximum of five years, or both.
CAK may also impose administrative financial penalties of up to 10 per cent of a business's gross annual turnover in the preceding financial year, alongside other corrective measures.
The Authority has urged suppliers who believe they are being subjected to unfair commercial conditions to retain relevant documents that could support complaints.
These include draft and signed supply agreements, joint business plans, email exchanges, payment records and other correspondence showing how the terms of their business arrangements were negotiated.
Retailers and other buyers have also been asked to review their existing contracts and ensure their dealings with suppliers comply with the law.
The warning comes several months after CAK conducted simultaneous inspections targeting six foam mattress manufacturers and distributors in Nairobi, Machakos, Kiambu and Kisumu counties.
During the March 31 operations, investigators collected electronic storage devices, laptops, mobile phones, management reports and sales records for forensic examination as part of an investigation into suspected anti-competitive practices in the mattress industry.
The latest move signals increased regulatory scrutiny of how powerful businesses deal with smaller suppliers, with companies now facing the possibility of substantial financial penalties and criminal prosecution if investigations establish violations of the law.
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