The Office of Competition and Consumer Protection announced on Wednesday that Eurocash was fined PLN 76 million for unfair use of contractual advantage. The decision concerns the company’s relationship with suppliers of agricultural and food products to its stores. Eurocash does not agree with the decision of the Office.
–
As it was informed, the conducted proceeding showed that Eurocash collected from suppliers of agricultural and food products a number of additional and unjustified fees. It was indicated that the main activity of Eurocash is wholesale and retail sale of food and everyday products.
–
The entrepreneur, also through subsidiaries, is the owner of the largest chain of wholesalers in Poland and the organizer of numerous retail chains, including: ABC, Delikatesy Centrum, Lewiatan, Gama, Groszek and Euro Sklep. The issued decision concerns the company’s relationship with suppliers of agricultural and food products to these stores – it was explained.
–
WATCH TVN24 ON THE INTERNET ON TVN24 GO >>>
–
Charges against Eurocash
– Some of the services for which the contractors paid were not performed at all, and some of the services should be provided by the company under the signed contract without additional remuneration. In addition, providers did not receive information on the costs and results of certain services. The aim of this type of action by Eurocash was to lower the remuneration of entities delivering agricultural and food products to stores – said Tomasz Chróstny, President of UOKiK, quoted in the press release.
–
He added that the value of the unjustified benefit obtained by Eurocash in the course of the proceedings as a result of the questioned practices towards entities for which the company had a contractual advantage amounted to over PLN 43 million in 2018-2020.
–
According to UOKiK, Eurocash did not provide contractors with keeping their products in the commercial offer, despite charging fees for it. The information obtained during the procedure shows that the entities that paid the fee for this service were treated in the same way as those that did not pay it. Suppliers also paid for enabling and organizing promotions in the stores of the commercial network and supervising them. At the same time, some of them incurred other fees and granted discounts to organize promotions in Eurocash stores, e.g. 14.5 percent. monthly remuneration for individual promotional services or for participation in the newsletter.
–
The fees charged by Eurocash also included the possibility for the supplier to sponsor integration meetings of the commercial network, but the contractor wishing to undertake this actually had to incur additional costs. The fee did not guarantee the possibility of promoting oneself (e.g. tasting the products) during such meetings.
–
The President of UOKiK also questioned the fees for training store personnel regarding the techniques of selling the supplier’s goods. In the opinion of the Office, in fact, these were general training courses on the sale of various product categories (e.g. meat, cold cuts, fruit, vegetables), and not the assortment of specific suppliers who paid for it. The same was the case with fees for educating and informing franchisees about news from the suppliers’ offer. The entrepreneurs asked by the Office of Competition and Consumer Protection did not know anything about the provision of such services, and did not provide information about new products to Eurocash and indicated that the company ordered and distributed products at its own discretion, the Office said.
–
The President of UOKiK about Eurocash: such actions are unacceptable
Moreover, some of the paid activities would be carried out by Eurocash anyway due to the economic interest of this entrepreneur. It was like that with monitoring of market demand and sales trends of the supplier’s products. Eurocash conducted such activities for all products available in stores, not only for those whose suppliers paid for it. The same was the case with the fees for supervising orders by shops included in a given commercial network.
–
– The analysis of the evidence leaves no doubt that the purpose of many fees charged by Eurocash was not to provide reliable services, but to reduce the remuneration due to suppliers of agricultural and food products. The company’s counterparties did not know how the services they were paying for would be performed, or whether they would be or were provided at all. Such actions are unacceptable and constitute an unfair use of contractual advantage – said Chróstny.
–
The issued decision is not final and may be appealed against to the Court of Competition and Consumer Protection.
–
There will be an appeal
Eurocash does not fully agree with the decision of the Office and intends to exercise its right of appeal to the Court of Competition and Consumer Protection.
–
“The court will decide whether the decision of the Office will be revoked, upheld or changed. The final amount of the fine and the payment date will be determined after the appeal procedure is completed and the final judgment in the above-mentioned case is issued,” the company said in its announcement.
–
photo-source">Main photo source: Shutterstock
—
