Banks, Financial Services, Latvia
International Internet Magazine. Baltic States news & analytics
Thursday, 28.03.2024, 19:41
Court declares PNB Banka insolvent
During the investigation the authority analysed agreements
between the suppliers and companies Norfos mažmena and Rivona concluded
in 2017 and 2018. The agreements showed that suppliers were obliged to pay
particular fees for sales promotion set for each of the product categories, as
well as pay for the retailer any unspent sums.
The Law prohibits retailers from requiring the suppliers to
pay the costs (or part of them) of sales promotion, except for the cases when
there is a written agreement between the retailer and the supplier regarding
the amount of such costs and types of sales promotion activities. In the
present case, Konkurencijos taryba found that the aforementioned retailers
agreed with their suppliers only on the costs, but no promotion activities were
described in the agreements.
“The companies not only failed to sign an agreement serving
the suppliers’ interest and goodwill, but also caused financial burden since
the suppliers had to pay for sales promotion, irrespective of whether the promotion
activities were undertaken or not”, said Ditė Anilionienė, Head of Unfair
Commercial Practices Investigation Group.
Although the Law was infringed by two companies constituting
one economic unit, EUR 72,000 fine was imposed only on Norfos mažmena which
applied the discounts agreed upon between Rivona and the
suppliers.
The Law sets prohibition for five major retailers,
namely MAXIMA, RIMI, IKI, NORFA, LIDL, to require from
their suppliers any “entry” fees, ask to buy goods or services from third
parties, as well as compensate for smaller-than-expected income, pay any
operational costs related to sales promotion, etc.
From 1 July 2019 the Law also prohibits retailers from
asking commercial discounts or any other type of remuneration from the
suppliers if it has not been agreed upon in writing, and apply punitive
measures to the suppliers if they decide to inform Konkurencijos taryba
or courts about unfair commercial practices exercised by the retailer.