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Photo by Vladimir Ivanovo (V)
The Competition Council has completed the UAB Palink investigation and found that the Mpaenins Mamenins Commercial Enterprise Insurance Act (MPNVD), by putting pressure on 7 providers supplying the company’s managed retail chain, will use the preliminary budget for measures sales promotion. Palink was surprised by the fine of 78,000 euros he received.
During the investigation, the Competition Council examined 2018 and 2019. It called for contracts with suppliers and explained that, although the marketing budget was preliminary, the company in electronic times required 7 suppliers to use the agreed marketing budget by the end of the year.
In electronic times, Palink instructed vendors to submit offers to release the unused marketing budget set out in the contracts (an updated marketing plan would be required, how to free up the unused marketing budget until the end of 2018), and required to bid to use marketing budget at year end. stock grid not suitable for budget), provided information on unused budget balance. The fact that the marketing budget of the size specified in the contracts was binding on suppliers also confirms the possible negative measures for suppliers, such as the suspension of purchases, longer withdrawal periods, the inability to take individual actions (since the problem of using marketing budget is not solved, all offers ignored pus purchases are suspended!).
The market may not agree to the preliminary amount of the planned marketing budget, but such preliminary agreement on the retailer’s actual shares should not become a mandatory requirement, as was the case in the case mentioned above, the Council emphasizes. Competition.
By forcing suppliers to use their promotional budgets for the current year, Palink paNNDD passed the ban on requiring suppliers to pay or otherwise remunerate sales promotions by or in conjunction with retail sales companies, except in cases where the amount of sales promotions and expected sales promotions an act is concluded in a literary agreement.
Such mandatory supplier participation in promotional activities as required by the company could not necessarily be in the supplier’s interest as the weakest party to the contract, as it would be free to plan the promotional activities themselves if there was no pressure to use the budget. of marketing.
According to MPNVD, who must demonstrate that supplier agreements meet the requirements of the law does not. A fine of 78,000 euros was imposed on the company for violating the provisions of said law.
The decision of the Competition Council can be appealed to the Vilnius Regional Administrative Court within 30 days from the day of its adoption.
The MPNVD prohibits the five major retail chains Aki, Lidl, Maxima, Norfa and Rimi from engaging in acts contrary to fair trade practice, which transfer the operational risk from the retailer to suppliers or impose additional obligations on them or boost supplier capacity. to operate freely in the market.
The objective of the MPNVD is to limit the use of market power by large market-based trading companies and to protect suppliers from actions contrary to the fair practices of large traders. Violations of the MPNVD can result in a fine of up to EUR 120,000.
Palink was surprised
Mindaugas Tamoinas, Head of the Department of the Department of Food and Groceries and Non-Food Products of the Trade Network By the Trade and Marketing Service, says that the decision of the Competition Council to impose fines surprised companies.
During the investigation, the Competition Council itself concluded that the contracts for the sale and purchase of goods with suppliers did not violate legal requirements, and a separate framework agreement was concluded for each marketing service. Furthermore, during the investigation, all suppliers indicated that they were not pressured or encouraged to use the planned quantity for preliminary marketing measures, says M. Tamoin.
According to him, in carrying out its activities, the company complies with the law, respects its business partners and maintains productive business relationships with suppliers.
As a poor business, we negotiate with them so that we can offer our customers the best range of products and the best prices, says M. Tamoin. During the investigation, we cooperate with representatives of the Competition Council and provide them with information for benevolent people. We will decide in detail whether the decision has been confusing.
Wait for the decision
March 19 V interview with Nijole Kvietkauskaitė, General Director of Palink, touched on the subject of the investigation carried out by the Competition Council.
The Competition Council fined Maxim and Norf for the provisions agreed with the suppliers. Was a similar check done before? The manager then asked V and heard the following response:
There was a study on exact agreements with suppliers last year. We still don’t have the results of that study. I would like to welcome the fact that we will still be able to work with our suppliers and handle the documents in such a way that we do not withdraw from the unpleasantness of the Competition Council. To avoid circumventing competition law, we participated in training in competition law. Employees of the commercial department perform tests and try to memorize the rules. All of our contracts are reviewed by the best attorneys. It seems to me that we try to support the smallest Lithuanian providers, but everything happens in life, you cannot buy insurance, so there is a critical attitude in the contracts. Mamenins retail chains live in the countryside min never know what to expect.
Rayti commented
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