In early July, the Polish competition authority (UOKiK) has opened preliminary investigations into the rebate practices of 19 retail chains. In particular, the authority will focus on whether retrospective rebates are used to exploit retail chains' contractual advantage towards small and medium-sized enterprises supplying food products.
The UOKiK has sent detailed requests to retail chains and to selected food product suppliers asking them for information on the types of rebates applied by retail chains.
In its press release of 7 September 2020, the UOKiK described the mechanism of retrospective rebates used in relations between retail chains and their suppliers, and pointed out that such rebates are also applied in contracts concluded for short periods of time.
It expressed its concerns about two types of practices of retail chains.
However, the press release does not provide crucial information on whether retail chains use individualised or standardised thresholds of rebates, or on whether the UOKiK believes that such rebates can cause a likely or actual market foreclosure for suppliers.
Importantly, the UOKiK is not conducting the proceedings pursuant to the Act on competition and consumer protection, but pursuant to the Act on counteracting the unfair use of contractual advantage in trade in agricultural and food products, which contains the definition of contractual advantage (not always synonymous with dominance).
Thus, if retail chains are found to be in violation of the law, they may face a penalty of up to 3% of their annual turnover, and not up to 10% of their annual turnover, as would be the case if the Act on competition and consumer protection applied.
For more information please contact Piotr Dynowski or Marcin Alberski.