• President of UOKiK Tomasz Chróstny has pressed charges of unfair use of contractual advantage over suppliers of agricultural products and foodstuff for Auchan Polska and SCA PR Polska (Intermarche).
• The charges against Intermarche concern the establishment of the conditions of cooperation during its term and obtaining discounts despite failure to meet the conditions on which they were originally conditional.
• The charges against Auchan concern the unjustified collection of fees from counterparties.

Large retail chains cooperate with numerous, frequently much smaller, suppliers of agricultural products and foodstuff. In the relationship between a retail chain and a counterparty, in many cases there exists an imbalance in the economic potential that is being exploited by a stronger party in order to impose unfavourable conditions on weaker entities. For suppliers of agricultural products and foodstuff, sales to the retail chain are frequently a matter of “to be or not to be”. They accept the conditions of cooperation imposed, without really having the opportunity to negotiate.

President of UOKiK monitors such practices on an ongoing basis and consistently takes actions aimed at eliminating them from the market. Firstly, he holds proceedings in cases of unfair use of contractual advantage and issues decisions. Secondly, he publishes market reports indicating, inter alia, which practices constitute an infringement.

The first report concerned discounts charged by retail chains. It pointed out that prohibited activities might consist, inter alia, in obtaining retrospective discounts despite failure to meet previously defined conditions. It is also unacceptable to set the terms of a discount for the following year of cooperation as late as following its beginning, with the obligation to take account of the new conditions retroactively.

Such practices could have been allowed by SCA PR Polska (purchasing headquarters for Intermarche stores). The Authority has found that the retail chain had concluded agreements on marketing conditions with suppliers of agricultural products and foodstuff for the following year with delay, expecting suppliers to take into account the new conditions from the beginning of this year. Thus, suppliers, when performing orders during the period from 1 January of a given year to the date signing the contract, were not sure under which terms and conditions sales would be settled retroactively. In addition, there were situations where suppliers were charged with additional discounts not provided for in the original supply contracts.

The findings also indicate that SCA PR Polska (Intermarche) obtained a retrospective discount from suppliers, despite the fact that the value of turnover on which the parties made its provision conditional in the previous agreement was not achieved in a given settlement period. As a result of these activities, suppliers were deprived of part of their income from cooperation with the chain.

- A situation in which suppliers of agricultural products and foodstuff do not know for several months under what conditions they sell their goods to the retail chain is absolutely unacceptable and constitutes unfair use of contractual advantage. The same applies in the event of a change in the terms of discounts reducing suppliers' income. Both practices do not allow suppliers to plan their business and manage profitability. They also seriously disrupt commercial relations which should be based on honesty, transparency, and partnership” - says Tomasz Chróstny, President of UOKiK.

The second of the published reports concerned sales fees. One of the practices described as unfair use of the contractual advantage was to require the supplier to pay for the service of dispersion of products to shop outlets from the central warehouse despite the fact that central logistics is one of the pillars of the modern distribution channel and the success of retail chains, thus being a natural element of their business model. President of UOKiK has charged Auchan of such practices. In the activities analysed in the course of the preliminary investigation in the period 2020-2021, the entrepreneur charged contractors with the costs of transporting goods from warehouses to individual outlets, thus shifting part of the costs of carrying out its own core business to suppliers. In addition, not all suppliers paid a transport fee. Some have been exempt from it, despite the supply of goods to central warehouses as well, which may indicate unequal treatment between partners.

- The imbalance in economic potential must not lead to the use of stronger market power to unilaterally impose adverse trade conditions on the weaker party to the contract, especially on small and medium-sized enterprises and farmers. Collecting fees from suppliers is justified only if the services provided by the retail chain have a real value for counterparties. In other situations, it is a way of transferring its own logistic costs to a trading partner and constitutes unlawful unfair use of contractual advantage” - says Tomasz Chróstny, President of UOKiK.

If the charges against Auchan and Intermarche are confirmed, the owners of retail chains may be fined of up to 3% of their annual turnover.

Entrepreneur, farmer, if you operate in the agricultural and 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 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: 22 55 60 246
Email: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL
You can also follow us on Instagram: @uokikgovpl