New Kenya Cooperative Creameries (New KCC) has halted milk supplies to Tuskys over defaulted payments running into millions of shillings.
The Competition Authority of Kenya (CAK) has already ordered the retailer not to pay its directors a dime without its approval even as Tuskys continues to maintain that its business has been adversely affected by COVID-19 while reality points to empty shelves and a struggling business
Business Daily on Wednesday reported that New KCC has halted supplies after the company exceeded its credit payment period of 60 days.
According to New KCC managing director Nixon Sigey, the milk processor is locked in negotiations with the retailer in order to agree on the terms of resumption of supplies.
“We are at the moment in discussion with the firm to agree the way forward after we stopped supplies of milk to the retailer,” said Mr Sigey.
Sigey did not disclose the amount of debt owed to New KCC, but said the milk processor has monthly business worth Ksh80 million with the retailer.
After being stung by the Nakumatt experience, New KCC is not taking chances and will pull all stops to ensure it gets paid for its product.
Tuskys owes suppliers Ksh1.2 billion but the suppliers are complaining of stalled negotiations with the retailer.
Maunufacturers have called on the government to intervene to stop the situation from execabating and avoid the Nakumatt scenario which saw the now defunct retail chain sink with Ksh18 billion owed to suppliers.
Meanwhile, the CAK buyer power department has barred Tuskys from expanding or paying its directors without approval as its seeks to protect the interests of the suppliers.
Tuskys has also been stopped from declaring or paying bonuses, fees or other compensation to its directors who are mostly relatives.
“Tusker Mattresses Limited from the date of this order must obtain written concurrence of the authority as a pre-condition for expansion. The Authority imposes a prohibition from declaring or paying bonuses, fees and other discretionary compensation to directors.” CAK wrote to the retailer in June.