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Office of Competition and Consumer Protection

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The President of UOKiK has initiated proceedings against other retail chains suspected of applying unfair retrospective discounts

< previous | next > 29.12.2020

The President of UOKiK has initiated proceedings against other retail chains suspected of applying unfair retrospective discounts
  • President of UOKiK Tomasz Chróstny initiated investigation procedures towards Kaufland Polska Markety, Eurocash and SCA PR Polska (Intermarche).
  • The objections concern, inter alia, the retrospective fixing of discounts and commercial conditions in relations with suppliers of agri-food products.
  • Jeronimo Martins Polska, owner of Biedronka stores, has recently been fined for similar practices.

Retrospective discounts (retro discounts) refer to purchases made in the past. They are used, inter alia, in relations between retail chains and suppliers of agri-food products. There are different systems of granting retrospective discounts. In some situations, a supplier signing a contract is not able to determine the value of the discount they have to grant to the retail chain and on the basis of which criteria. Such activities may be recognised as prohibited action of the dominant party to the agreement, constituting an unfair leveraging of contractual advantage.

Jeronimo Martins Polska, owner of Biedronka stores, has been fined for similar practices. The President of UOKiK also verifies discount policies applied by other retail chains. The first effect of the analysis has been to initiate three explanatory proceedings which concern companies: Kaufland Polska Markety, Eurocash (organiser of numerous chain stores, including ABC, Delikatesy Centrum, Lewiatan, Gama, Groszek and Euro Sklep) and SCA PR Polska (company responsible for purchases in the Intermarche chain).

Following the preliminary findings of the Office, it was recognised, inter alia, that entrepreneurs conclude agreements with suppliers of agri-food products for a given year with a delay - in such situations the agreements are retroactive in force. Suppliers may therefore be unfamiliar over a long period of time with the conditions under which they supply agri-food products to the chain. In addition, there may also be situations where suppliers are charged with additional discounts not provided for in the original delivery contracts.

 - The action of three entrepreneurs may be a demonstration of leveraging their contractual advantage, therefore, during the course of the explanatory proceedings, we will verify the preliminary findings. A situation in which suppliers of agri-food products do not know for several months the financial conditions under which they execute deliveries to the retail chain and whether the cooperation is profitable for them at all is absolutely unacceptable. Likewise, we must not allow situations where, in the course of cooperation, a larger entrepreneur imposes additional retroactive discounts, going significantly beyond the conditions originally agreed upon. Commercial relations must be based on integrity and responsibility, especially in such an economically important agri-food sector - says President of UOKiK Tomasz Chróstny.

Explanatory proceedings are conducted with regard to a specific matter, not against any specific entities. If suspicions of unfair practices by entrepreneurs are confirmed, then the President of UOKiK may charge them with leveraging their contractual advantage, which may be subject to a fine of up to 3% of the entrepreneur’s annual turnover.

The analysis of retail chains’ practices with regard to retrospective discounts will be taken into account in drawing up the report on researching this market and developing proposals for legislative amendments to the next year’s implementation of the EU Directive concerning unfair business-to-business commercial practices in the chain of supplies of agricultural products and foodstuffs.

Entrepreneur, farmer, if you operate in the agri-food industry and your major counterparty abuses its competitive advantage by imposing unfavourable conditions of cooperation – report it to UOKiK. We have launched a special form to assist you in reporting irregularities. You can fill it out here: https://ankieta.uokik.gov.pl/formularz-zgloszenie-przewaga/.

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files

 

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