• President of the Office of Competition and Consumer Protection Tomasz Chróstny obliged SCA PR Polska (Intermarche Group) to change practices that could constitute an unfair use of contractual advantage.
• As a result, SCA PR Polska is to settle any late payments towards its suppliers of agri-food products, along with interest, as well as to change the way of settling disputed invoices. 
• This is the first-ever decision by UOKiK that provides public compensation to entities other than consumers – farmers and businesses.

In April 2020, UOKiK President Tomasz Chróstny initiated proceedings to verify whether 100 of the largest agri-food market entities were making unfair use of their contractual advantage over smaller trading partners, including farmers. Thanks to this intervention, the majority of entrepreneurs paid their debts to their suppliers – totalling more than half a billion złotys – and removed questionable provisions from commercial policies and concluded contracts. One of the entrepreneurs who failed to settle outstanding liabilities at the time was SCA PR Polska (SCA). Operating as part of the group of companies, SCA PR Polska was responsible for purchasing at the Intermarche chain. This prompted the UOKiK President to initiate proceedings against the entrepreneur.

"During the investigation, we found that the company was making late payments to its counterparties, in cases where part of an invoice was called into question, it would not pay invoice amounts that were not questioned, and that it took too long to explain invoice discrepancies. This might have been a way for SCA to finance itself at the expense of agri-food product suppliers", said UOKiK President Tomasz Chróstny.

Evidence gathered by UOKiK shows that SCA failed to pay suppliers of agricultural and food products on time. Between 2019 and 2020, the total amount of outstanding receivables reached several hundred million złotys. Although most delays did not exceed 10 days (more than 70% in 2020), there were also delays of more than 100 days in some extreme cases.

Moreover, whenever there occurred discrepancies in terms of the price or quantity of invoiced goods, the company would not pay the suppliers for the entirety of goods invoiced until the situation was clarified. This may have been inconsistent with good conduct principles – a business entity ought to pay its dues for the undisputed portion of the invoiced goods by the due date.

UOKiK President also questioned the excessively lengthy process of clarifying discrepancies in certain cases, which resulted in unjustified delays in payment. In some instances, such a process took as many as several months.

Commitment

During the proceedings, the company declared that it would change the practices called into question and remove their effects. First, it undertook to pay any late amounts due, including undisputed amounts in invoices containing discrepancies, together with interest on late payments incurred between 1 January 2019 and the day the decision of the UOKiK President to close the proceedings became final. Second, SCA also declared that it would amend the contracts to eliminate the provisions requiring the submission of a duly issued invoice as a condition to receive payment of the entire amount due.

UOKiK President decided that obliging SCA to implement its commitment would rapidly improve the situation of the chain's suppliers. In making this decision, the President took into account such things as the attitude of the company, which initiated actions aimed at ceasing its questionable conduct shortly after the commencement of the proceedings – SCA implemented procedures accelerating the process of clarifying discrepancies and introduced rules providing for partial payment of disputed invoices, i.e. the payment of invoice amounts that do not raise objections.

"Based on the terms imposed, SCA will have 6 months from the decision's effective date to pay any outstanding dues along with interest and no more than 3 months to propose amendments to contracts to its suppliers. Afterwards, it will have to provide us with the relevant information and evidence of fulfilling its commitment", said UOKiK President Tomasz Chróstny.

If you are a farmer or entrepreneur operating in the agri-food industry and your large counterparty abuses its contractual advantage by imposing unfavourable terms of cooperation, please do not hesitate to notify UOKiK. We have prepared a special form to help you report any irregularities. Click here to fill it out: 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: biuroprasowe@uokik.gov.pl
Twitter: @UOKiKgovPL