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Conference on Fair Cooperation between Retailers and Suppliers



At a conference on 27 November, the Competition Council (CC) of Latvia brought together suppliers, retailers and law enforcers in order to discuss upcoming changes regarding the newly adopted Law on Prohibition to Use Unfair Retail Practices.

During the conference, the CC explained the main concepts of the law and presented guidelines for law implementation, while representative from the Ministry of Agriculture highlighted foreign retail experience, i.e. initiatives to improve food supply chain operation within European Union. Furthermore, views on the most significant changes and further actions in the context of the new law were presented by two associations – Latvian Federation of Food Companies and the Latvian Food retailers association –, a representative of a food producer undertaking AS Dobeles dzirnavnieks and a representative of a retail chain SIA Iepirkumu grupa. In addition, from the legal perspective, the allocation of responsibilities between retailers and suppliers was analysed by an attorney of law.

In the conclusion of the conference, all the speakers, as well as the participants discussed and exchanged opinions on possible ways to balance the demands between retailers and suppliers.

The aim of Law on Prohibition to Use Unfair Retail Practices is to balance interests of retailers and their suppliers and to prevent food retailers from using their market power to apply exploitative requirements to suppliers. Subject to this law will be all food retailers and those non-food retailers who have significant market power.

Until the 1 January 2016, the retail trade is regulated by a special Article of the Competition Law that provides for a certain prohibitions to those retailers who have significant market power against a particular supplier. After the new law enters into force, the regulation of non-food retailers will remain almost unchanged and the relevant prohibitions form the Competition Law will be included in the new law. As refers to food retailers, the new law not only widens the scope to all market participants, including smaller shops, but also provides more detailed and longer list of prohibited actions.

For infringements of the new law, the CC will be entitled to impose retailers with a fine up to 0.2% of the net turnover of an undertaking for the previous financial year, but not less than 70 EUR.

Law on Prohibition to Use Unfair Retail Practices will enter into the force in 1 January, 2016.

During the conference, Ms Skaidrīte Ābrama, the chairperson of the CC, said: “The aim of the law is not to protect inefficient producers and suppliers, but to balance the interests of both retailers and suppliers. It is substantial to allow the business of food producers to operate, while developing their competitiveness and providing consumers with diverse products. Therefore, I invite all traders and suppliers to respect each other, as no operation of one if possible without the another party.”