The Competition Authority of Kenya (CAK) has issued a notice that retailers and other businesses may be fined up to Ksh10 million or face up to five years in prison if they impose unfair commercial terms on suppliers.

CAK identified practices such as delayed payments, mandatory rebates, promotional contributions and shifting operational costs to suppliers as examples of buyer‑power abuse that could breach the Competition Act.

The authority’s cautionary notice, released on 11 November, highlighted continued instances of such terms in the retail sector, prompting the threat of criminal and administrative penalties.

CAK stressed that buyers should not dictate terms solely because of market power and that suppliers must be allowed to discuss and negotiate agreement conditions.

The regulator clarified that it has not mandated suppliers to enter joint business plans with retailers, stating that any such arrangements must be voluntary.

Signing a supply agreement does not automatically guarantee that its terms are fair or compliant with the law, according to CAK.

Businesses found culpable could face a criminal fine of up to Ksh10 million, imprisonment of up to five years, or both, and may also be hit with an administrative penalty of up to 10 percent of their gross annual turnover for the previous financial year.

CAK said it will continue monitoring retail commercial practices and will launch full investigations and enforcement actions against specific retailers where breaches are established.

Suppliers are urged to keep detailed records of all commercial dealings, including draft and signed agreements, joint business plans, correspondence, payment records and documentation of how terms were negotiated.

Businesses or suppliers who believe they are subject to unfair or imposed terms are encouraged to lodge complaints with CAK for investigation.