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Retail trade

The purpose of the Law on the Prohibition of Unfair Practices of Retailers is to limit the use of market power exercised by the major retailers (at present such companies include the supermarkets MAXIMA, RIMI, IKI, NORFA, LIDL) and ensure the balance of interests between food and drink suppliers and retail companies having such market power.

Part 1 of Article 3 of this Law stipulates that retailers shall be prohibited from carrying out any actions contrary to fair business practices whereby the operational risk of the retailers is transferred to suppliers or they are imposed supplementary obligations or which limit the possibilities of suppliers to freely operate in the market and which are expressed as requirements for the supplier:

1 to pay directly or indirectly or remunerate in any other way for consent to start to trade in the supplier’s goods (“entry” fees);

2 to compensate for the lost or smaller-than-expected income of the retailer from the sale of goods received from the supplier;

3 to compensate for the operational costs of the retailer related to equipping new stores or renovating the old ones;

4 to acquire goods, services or property from third parties specified by the retailer;

5 to relate the prices and supply conditions of goods supplied to the retailer with the prices and supply conditions of goods applied by the supplier to third parties;

6 to change the basic supply procedures or goods specifications without notifying the supplier thereof within the time limit specified in the agreement, which may not be shorter than 10 days;

7 to accept unsold food products, except for non-perishable packaged food products if they are safe, high-quality and at least 1/3 of time before their expiration date remains or they have no expiration date and there is a prior agreement in relation to their return;

8 to pay directly or indirectly a part of the costs of sales promotion carried out by the retailer or together with it or to compensate for such costs in any other way, except for the cases where there is a written agreement between the retailer and the supplier regarding the amount of costs to be paid and sales promotion activities to be applied;

9 to compensate for the expenses incurred while investigating consumer complaints, except for the cases where a justified consumer complaint was due to the circumstances which are the responsibility of the supplier. In this case, the amount of expenses which the retailer requests the supplier to compensate for must be substantiated by the actual expenses of the retailer;

10 to pay directly or indirectly or to compensate for the arrangement of goods, except for the cases where there is a written agreement between the retailer and the supplier regarding payment for the arrangement of goods.

A fine of up to 120 000 Eur shall be imposed on retailers for the prohibited unfair practices.