Warning of ‘distance’ from the Competition Authority to the markets of the chain

The Competition Authority warned about the distance for the opening of chain markets, noting that “it is considered that retailers within the same economic integrity within a certain distance can be prohibited from opening a second branch and that these can be prevented from companies carry out an acquisition operation within the same scale”.

In the “Turkey FMCG Retailing Final Report” prepared by the Authority, it was stated that some regulations should be implemented to prevent abuse of purchasing power in the sector.

In this context, some suggestions are listed below regarding the provisions that should be included in the “Draft Law to Amend the Retail Trade Regulation Law”:

PROHIBITION OF PAYMENT TO SUPPLIERS FOR ADVERTISING

Regarding unfair trade practices in the bill, payment terms greater than 30 days for perishable agricultural and food products, payment terms greater than 60 days for other agricultural and food products, cancellation notices made in a short time for perishable foods , unilateral changes to the buyer’s contract, the loss and transfer of risk of damaged goods to the supplier must be prohibited.

Within the scope of the same norm, a norm is necessary that prohibits the return of unsold products, the payment of the supplier’s listing, shelf and stock costs, the prohibition of the supplier paying for promotion, marketing and advertising , or that retailers can charge a fee only if there is an agreement between the parties.

DEMAND FOR INDEPENDENT UNIT FOR THE RETAIL INDUSTRY

The following statements were used in the report, which called for the establishment of an independent unit to monitor and audit these regulations:

“The unit in question must be structured specifically for the task, have powers to make complaints or investigations ex officio, have powers to carry out unannounced investigations, request information, establish fines and directly put an end to the infraction. It is considered that the fines that are established to prevent unfair commercial practices should be dissuasive, the administrative fine should be established on the volume of business of the company to provide dissuasion, and there should be an opportunity to increase the sanction in case of recidivism. .”
The report noted that linking the opening permits for new stores by chain stores to population criteria may have some anti-competitive effects, for which reason it was noted that it would be appropriate not to implement such regulation.

The report noted the following regarding the distance requirement for chain stores:

“Regarding the opening of stores, it is considered that retailers within the same economic integrity within a certain distance can be prohibited from opening a second branch and that these companies can be prevented from carrying out a takeover operation within the same scale. In fact, chain stores that belong to the same group can be seen at very close distances from each other in certain regions, and this can prevent a new retailer from entering that region. Therefore, it is considered that the regulation on the matter will have positive effects on the market in a competitive sense.”

‘THE PRODUCT ADVERTISED FOR DISCOUNT MUST BE IN THE STORE’

In the report, it was pointed out that some regulations could be made for some practices that can negatively affect the competitive structure of the sector in the retail sale of mass consumer goods or mislead consumers.

In the report, which emphasized that the product must be available in-store and that the product must be sold at the advertised discounted price during the period in which it is advertised to be discounted (with traditional media, social media, or other announcements and announcements), the report stated: “Consumers often raised similar issues in their complaints, and that products advertised at a discount were sold at retailers. It is considered that this regulation will benefit both the consumer and the defense of competition.

SPECIAL PACKAGING PRODUCT WARNING

The report indicated that it was evaluated that agreements made for suppliers to produce special weight products for a single-chain market were prevented, and the following was noted:

“In this context, it can be seen that a certain size of products can be produced exclusively for a single retailer, as opposed to known or standard packaging. These applications are widespread in the industry. These agreements can negatively affect competition, and these agreements can also create various illusions for consumers. Regardless of whether such weight-package-size differences can be easily perceived by the consumer, it is thought that the production of a certain specific pack for a single retailer may be prohibited by regulation. (AA)