Added Wednesday, 1 December 2021, 4 p.m.
It is about unjustified additional charges from suppliers.
We are talking about the Eurocash chain, which is based in Komorniki near Poznań, and was established in the 90s on the basis of Elektromis, previously founded by Mariusz Świtalski. It is primarily a network of wholesalers and franchise stores (including ABC, Delikatesy Centrum, Lewiatan, Mila).
Already in October last year, we wrote about the doubts of the president of the Office of Competition and Consumer Protection related to the company’s operations. Proceedings were initiated against the company, in which the fine could amount to 3 percent of the annual turnover. On Wednesday, the Office of Competition and Consumer Protection announced that the procedure was over.
– The conducted proceedings showed that Eurocash collected from suppliers of agricultural and food products a number of additional and unjustified fees. Some of the services for which the contractors paid were not performed at all, and some of the services should be provided by the company under the signed contract without additional remuneration. In addition, providers did not receive information on the costs and results of certain services. The aim of such activities by Eurocash was to lower the remuneration of entities delivering agricultural and food products to stores. The value of the unjustified benefit obtained by Eurocash as a result of the questioned practices towards entities for which the company had a contractual advantage, determined in the course of the proceedings, amounted to over PLN 43 million in 2018-2020 – says the President of UOKiK, Tomasz Chróstny.
What are the paid services? For example, to ensure maintenance in the commercial offer or to enable and organize promotions in the stores of the commercial network and to supervise them. Suppliers were also supposed to pay, for example, for participation in a promotional newsletter and the possibility of sponsoring integration meetings of the commercial network. – However, the contractor who wanted to undertake this actually had to bear additional costs. The fee did not guarantee the possibility of promoting oneself (e.g. tasting the products) during such meetings.
The fees for training the store personnel, as well as educating and informing franchisees about new products from the suppliers’ offer were also questioned. – When asked by UOKiK, the entrepreneurs did not know anything about the provision of such services, and did not provide information about new products to Eurocash and indicated that the company ordered and distributed products at its own discretion.
– The analysis of the evidence leaves no doubt that the purpose of many fees charged by Eurocash was not to provide reliable services, but to reduce the remuneration due to suppliers of agricultural and food products. The company’s counterparties did not know how the services they were paying for would be performed, or whether they would be or were provided at all. Such actions are unacceptable and constitute an unfair use of contractual advantage. The decision with a financial penalty of PLN 76 million imposed on Eurocash ends the difficult and tedious procedure in which we not only looked at the equivalence of mutual benefits, but also verified whether the services were actually performed. It is also a valuable experience for us, which we will use in subsequent proceedings, including in the field of the so-called leaflet fees – says the President of UOKiK, Tomasz Chróstny.
Importantly, the decision is not final, and the company may appeal against it to the Court of Competition and Consumer Protection.