Legislation, Lithuania, Markets and Companies, Retail
International Internet Magazine. Baltic States news & analytics
Friday, 26.04.2024, 07:52
Lithuania: retailer fined for unfair commercial practices to suppliers
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.