Watchdog Clears Shoprite Supermarket in the Bar Codes Deal

by Lawyer Wanz

Comesa Competition Commission has cleared Shoprite Supermarket after it ruled that the deal signed by the two firms did not amount to an anti-competitive practice as had been argued by suppliers and other firms offering bar coding services.

Shoprite Supermarket had signed a deal that compels suppliers to get their bar codes exclusively from GS1 Kenya.

The COMESA competition commission did not give a comprehensive reason for the ruling, instead only delivering the final verdict

The Commission determined that the conduct by Shoprite did not have the effect of preventing, restricting or distorting competition within the common market,” reads the ruling in part.

Had they been found to have violated the law, both companies would have incurred a financial penalty of up to 10 percent of their annual turnover units earned in the preceding business year.

In February, suppliers and bar code firms such as Barcodes Uganda had protested to the commission over the agreement that had seen Shoprite turn down products which did not have GS1 barcodes.

The contentious matter was only in reference to Ugandan outlets but it has implications on other seven markets where Shoprite operates.

The outcome means that Shoprite, which has a running agreement with GS1 Kenya, is free to continue compelling suppliers delivering merchandise to obtain barcodes from the GS1.

Shoprite runs about 113 outlets spread out in Kenya, Uganda, Zambia, Eswatini, DRC, Malawi and Madagascar.

Information available on Shoprite Holdings website shows that manufacturers of general merchandise seeking to supply to any Shoprite outlet must register with GS1.

Barcodes Uganda, which sources its bar codes from the International Barcodes Network has been protesting the Shoprite deal saying it is locking out other legitimate sellers.

To have your goods shelved and sold, you are forced to purchase highly priced GS1 barcodes and incur annual costs to continue using the barcodes,” said the firm.

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