Kenyan suppliers express heightening concerns over delayed payments by retailer

KENYA – Once beaten twice shy, seems to be the riddle banging Kenya suppliers mind following Tuskys supermarket’s recent announcement that it is facing constrained cash flow due to the impact of the coronavirus on its business.

While most Kenyans remember Nakumatt in passing, its suppliers continue to bear the hurt of losing money they had broken sweat for, worse, with the possibility of recovery next to impossible.

It is such bitter supplier experiences that have aroused fears among the suppliers of Tuskys Supermarket, which is the latest retailer in Kenya to fall into troubled waters, reports Kenyan Digest.

A few weeks ago, the supermarket announced that it is facing difficulties in paying suppliers, banks and landlords. The retailer wrote to its suppliers informing them that even recently renegotiated payment terms may not be honoured on the agreed timelines.

“Supplier obligations may be deferred and therefore some of your members have been impacted. We have communicated individually to these suppliers that their payments will be delayed,” the letter by Tuskys chief executive officer Dan Githua said.

But in a fresh twist to the dispute, manufacturers have now written to the Ministry of Industrialisation and Trade and the Competition Authority of Kenya (CAK) calling for speedy resolution of the debt impasse, reports Business Daily.

“Manufacturers have informed us that their payments remain outstanding to date for goods supplied as early as this year and there has been low communication from yourselves on the measures indicated in your letter,” Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga said in the May 22 letter to Tuskys.

“This situation is now causing apprehension within the manufacturing sector and which may lead to low supply of goods in the market in order to manage their risks,” she added.

In the letter, which is copied to Industrialisation and Trade Cabinet Secretary Betty Maina and CAK Director-General Wang’ombe Kariuki, the manufacturers want Tuskys to provide more detailed information on its proposed payment plans for manufacturers who supply to it, indicating the average payment periods and a detailed financial plan on its current financial measures.

Away from the piling supplier debts, reports say that sections of the Tuskys branches have been reporting stock-outs in the same fashion that befell Nakumatt Supermarket.

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