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Retailer in Lithuania fined for unfair commercial practices to suppliers

Christian Fernsby ▼ | September 16, 2019
Konkurencijos taryba found that Norfos mažmena and Rivona infringed the Law on the Prohibition of Unfair Practices of Retailers by setting requirement for food and drink suppliers to pay fees for sales promotion.
Norfos mažmena
Europe   Norfos mažmena
During the investigation the authority analysed agreements between the suppliers and companies Norfos mažmena and Rivona concluded in 2017 and 2018.

Topics: Lithuania retail unfair practices

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.

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.