Big three supermarkets evade meeting with suppliers - Daily Nation

Big three supermarkets avoid suppliers over Sh8bn debt

Wednesday September 30 2015

Big three supermarkets including Naivas, Nakumatt and Tuskys have distanced themselves from a Sh8 billion debt dispute with suppliers adding that they will not attend meetings to settle the matter.

Nakumatt managing director Atul Shah during a past interview. Big three supermarkets including Naivas, Nakumatt and Tuskys have distanced themselves from a Sh8 billion debt dispute with suppliers adding that they will not attend meetings to settle the matter. PHOTO | FILE | NATION MEDIA GROUP 

By LILIAN OCHIENG'
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Retailers have distanced themselves from a Sh8 billion debt dispute with suppliers adding that they will not attend meetings to settle the matter.

The dispute raised by suppliers through the Kenya Association of Manufacturers (KAM) in a letter dated September 9, addressed Tuskys, Nakumatt and Naivas stating excessive delays in payments.

Retailers however ignored the letter, opting out of a meeting that was set for Tuesday.

SHORT NOTICE

“We did not attend the meeting with KAM as the notice was too short, the issue is however new to us as the model of paying for goods after they are sold out is practiced worldwide,” said Tuskys CEO David Githua on phone.

His sentiments followed those of Nakumatt who denied receiving any letter and termed the meeting as a general one that they cannot attend.

“We owe money to suppliers but our corporate policies do not allow us to discuss this with third parties,” Nakumatt managing director Atul Shah said on phone.

Naivas managing director David Kimani, said he had received the letter but added that invoices are settled within the required timelines.

Fast-moving goods are settled in a fortnight while slow moving goods are settled within 60 days.

NEW MEETING

KAM has now pushed the meeting to next week. Key decision makers in the retail chains and in the supply business, together with manufacturers will attend the meeting.

“We have now turned to the Retail Trade Association of Kenya to sort out some of these concerns. There are modalities needed to be aired between the suppliers and retailers,” said Tobias Alando, head of membership development at the Kenya Association of Manufacturers.

Mr Tobias told the Nation that there is evidence that suppliers are owed billions in shillings.

KAM in the letter says the retailers hold back payments dating back to 2014 that should be immediately released to the suppliers.

“Many of our members are now facing dire cash flow constraints, forcing them to borrow heavily to finance their operations,” Phyllis Wakiaga, KAM’s chief executive, says in the letter to retailers.