A customer buying Sugar from a local supermarket. [Photo/BusinessDaily]
The Competition Authority of Kenya (CAK) will probe supermarkets over claims of anti-competitive behavior amid complaints by consumers in relation to prepackaged foods.
Supermarkets are increasingly selling products under their own brands or private labels, but with it has emerged a new battlefront between them and manufacturers of major local and international brands.
This vicious battle between the manufacturers and the retailers has been heating up with supermarket chains rolling out promotional campaigns pitting their own labels against major brands in the fight for the price-sensitive customers.
A spot-check confirmed that from basic food items to non-food products, almost all major supermarket chains have unveiled their own brands in the last two years or so. Some manufacturers have even accused retail chains of pushing their brands further back on the shelves against best practice and ethical competition.
A key incentive for supermarkets owning a brand is that it enables them to reap a higher profit margin than they would on other brands while selling the goods at a lower price to consumers.
Kenya Bureau of Standards (Kebs) issued a stern directive to supermarkets on the private re-packing and re-branding of foods. Kebs warned that supermarkets repackaging and rebranding goods they have not manufactured must adhere to standards set by the bureau in their trade environment by ensuring the products are certified.