A Tuskys store on Muindi Mbingu Street, Nairobi. The supermarket chain has not been paying its suppliers and landlords, blaming delays on the impact of the coronavirus pandemic. FILE PHOTO | NMG Manufacturers want the government to urgently intervene and oversee the payment of money owed to Tuskys supermarkets’ suppliers to avoid a full-blown debt crisis.
The suppliers are jittery over the debt impasse, especially following the collapse of Nakumatt and Uchumi supermarkets, which sank with Sh18 billion owed to them.
Their concerns follow an admission by Tuskys that it is facing constrained cash flow due to the impact of the coronavirus on its business.
This will mean delays and reductions in payments to suppliers, banks and landlords, chief executive officer Dan Githua said.
The retailer had renegotiated payment terms, but while offering reassurances that it planned to honour the payments, it revealed that it may not honour them at the agreed time.
The company has maintained that it is committed to protecting the interests of its suppliers.
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.
Standoff
Kenya Association of Manufacturers (KAM) chief executive Phyllis Wakiaga said that while the lobby has held discussions with Tuskys management over delayed and late payments, the continuing standoff is likely to hurt the whole manufacturing sector and snowball into a bigger crisis.
Following the talks, Tuskys had promised to undertake various measures to pay for goods supplied, Ms Wakiaga said.
“However, 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,” Ms Wakiaga said in the May 22 letter to Tuskys, which the Sunday Nation has seen.“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.“We further request … an urgent meeting with yourselves in the presence […]