Competition Protection Commission approves retail chains' proposed commitments

In 2009 the Competition Protection Commission started an investigation of some of the largest retail chains in Bulgaria – Metro Cash and Carry Bulgaria, Billa Bulgaria, Kaufland Bulgaria, Pikadili, Maxima Bulgaria and Hit Hypermarket – for suspected prohibited practices. The commission opened the investigation after the Bulgarian Confederation of Employers and Industrialists informed it that the retail chains treated Bulgarian manufacturers unfairly.

At the beginning of 2011 the commission issued a statement of objections, accusing the retail chains of agreeing on certain mechanisms to coordinate:

• their trade policy in the market for the delivery of goods; and
• their marketing policy by conducting promotional campaigns.

The alleged anti-competitive mechanisms involved the following:

• the indirect exchange of sensitive information about supply prices agreed between each supplier and each of the chains;
• a 'most-favoured nation' clause; and
• an obligation for suppliers not to participate in promotions conducted by the different retail chains at the same time.

According to the commission, the simultaneous implementation of these provisions could result in conscious coordination between the retail chains and in unified trade and marketing policies.

The retail chains replied to the statement of objections and submitted proposals for commitments in order to preserve competition in the market. The commission approved these proposals in a decision issued on July 19 2012.

The commission found that the proposals contained specific measures which may prevent the restriction of competition in the relevant markets. In general, the commitments would oblige the retail chains to abolish the problematic provisions in their supply agreements.

The retail chains must now draft and present the new versions of their agreements to the commission within a certain timeframe.

For further information on this topic please contact Ilko Stoyanov at Advokatsko Druzhestvo Andreev Stoyanov & Tsekova in cooperation with Schönherr Rechtsanwälte GmbH by telephone (+359 2 933 1072), fax (+359 2 986 1105) or email (i.stoyanov@schoenherr.bg).