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Retail

Poland’s UOKiK Fines Kaufland Over Alleged ‘Unlawful Practices’

Poland's consumer watchdog, UOKiK, has imposed a fine of PLN 140 million (€30.7 million) on Kaufland Polska Markety over alleged unfair use of contractual advantage and mislabelling of vegetables.

In the first decision, UOKiK imposed a fine of PLN 124 million, claiming that Kaufland Polska Markety reportedly asked suppliers to reduce the price of agricultural and food products after they were sold.

In such situations, with protracted negotiations of a contract for the following year, the supplier did not know on what terms he would deliver in the period from the beginning of the year until the date of signing the contract, the consumer watchdog added.

'Rules Of Cooperation'

Tomasz Chróstny, president of UOKiK, explained, “The rules of cooperation between the retail chain and its suppliers, including discount terms, should be clearly defined and known to the parties before the contract is signed.

“However, Kaufland Polska Markety's contractors were not sure what remuneration they would receive for supplies and whether the price negotiated earlier would not be reduced.”

The practice of negotiating the contract after the start of the year affected more than 800 counterparties between 2018 and 2020, of which 72 had to pay unfavourable compensation for a total amount of nearly PLN 37 million, UOKiK added.

The UOKiK also alleged that Kaufland charged some suppliers of agricultural and food products additional discounts that were not provided for in the contract.

The contracting partner of the retail chain, therefore, did not know when he would be asked to give this discount or how much it would be.

The decision by UOKiK is not final and can be appealed in court. Kaufland is yet to respond to the decision.

Country Of Origin Labelling

In another decision, the consumer watchdog imposed a PLN 13.2 million fine on Kaufland Polska Markety for reportedly mislabelling the country of origin on vegetables.

Chróstny explained, "The right to information is a fundamental right of every consumer. At the same time, information about products must be reliable, clear, and easy to understand for consumers, and it must not be misleading in any way.

"Trade inspections confirmed that consumers at Kaufland shops regularly received misleading information about where vegetables come from, which influenced their purchasing decisions."

Recently, Poland's Eurocash criticised the actions of UOKiK, the country's competition and consumer protection office, saying that a fine the body imposed on the retailer and wholesaler could only serve to strengthen the 'discriminatory practices of suppliers' towards independent stores.

© 2022 European Supermarket Magazine. Article by Dayeeta Das. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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