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Dia Portugal Seeks To Mitigate Competition Concerns

Published on Mar 31 2016 2:47 PM in Retail tagged: Trending Posts / Portugal / Dia / Competition

Dia Portugal Seeks To Mitigate Competition Concerns

Dia Portugal has proposed a set of commitments to address concerns raised by Competition Authority (AdC), which began proceedings against the company in April 2014, in regards to how it deals with franchisees and resale prices.

The proposed commitments include the mailing of a circular letter to Dia’s franchise network, clarifying that the retailer only recommends resale prices or determines maximum resale prices, and that franchisees are free to adopt lower prices.

Dia Portugal also pledged "not to conclude franchise contracts with clauses restricting the freedom of franchisees to autonomously determine the resale prices, clarifying in these contracts that no contractual provision should be interpreted as restricting that freedom".

The commitments submitted by Dia Portugal are now subject to public consultation for a period of 20 working days.

Two years ago, the Competition Authority opened an investigation against Dia Portugal "for alleged infringement of national competition rules in the context of the franchise relationship between this company and its franchisees."

The investigation, which included the analysis of all franchise contracts, a questionnaire addressed to all franchisees (about 300) and inquiries and inspections in several locations, "revealed the existence of competition concerns in relation to the definition of resale prices in the context of the franchise relation at stake".

© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. To subscribe to ESM: The European Supermarket Magazine, click here.

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