When Ms Nyaruai visited ArtCaffe, a bakery and coffee shop owned by private equity firm ECP, she had legitimate expectations that they would not wilfully mislead her culinary preference and give her something that would clearly cause her discomfort.
“The complainant alleged that she purchased gluten-free cookies from Artcaffe which affected her health as she is gluten-intolerant. Upon contacting Artcaffe, she was informed there was a disclaimer that the cookies had traces of gluten,” said the Competition Authority of Kenya (CAK) in its annual report.
According to CAK, Artcaffe misled consumers on the labelling of their chocolate cookies by indicating on the package they were gluten-free, while at the same time indicating that the cookies may contain traces of gluten.
Such an admission could have created a huge furore, but did ArtCaffe come out with just a slap on the wrist?
The investigations culminated in a settlement under section 38 of the Competition Act which allows companies to pay off the complainant or a fine.
“Artcaffe made an undertaking to ensure the labelling of their gluten-free cookies shall have adequate and accurate information. Further, the manufacturing environment is controlled in order to prevent contamination of cookies with gluten,” CAK Director-General Kariuki Wang’ombe said in the annual report.
In a review of the cases investigated by CAK this year, there is a discernible trend where firms will fall over themselves to compensate a complainant – arguably to avoid being called out in public or having a whole line of products withdrawn from the shelf.
It is also clear that the settling with one customer will arguably be cheaper than a class suit where a firm may have to face mass retribution in brand and in the pocket.