The Croatian Competition Agency (CCA) has levied a fine of €212,500 against TOMMY d.o.o., a company based in Split, for breaching the Act on the prohibition of unfair trading practices in the business-to-business food supply chain (UTPs Act).

The administrative proceedings were initiated after a complaint was filed, alleging that TOMMY sold food products to consumers at prices lower than what it paid to suppliers, including VAT. This practice is explicitly prohibited under the UTPs Act.

The UTPs Act outlines specific unfair trading practices, particularly when a buyer sells agricultural or food products below the purchase price. Exceptions to this rule are limited to specific circumstances, such as selling products nearing expiration, clearance sales, or complete liquidation of stock. In this case, the CCA determined that none of these exceptions applied to TOMMY's actions.

On October 4, 2023, TOMMY sold 12 food products at prices lower than the purchase price due to a 10% discount on already discounted promotional prices. The CCA clarified that while offering discounts is permissible, the combination of discounts and promotions leading to prices below cost constitutes a violation of the UTPs Act.

The CCA emphasized that the violation was not about the existence of discounts but rather the resulting pricing that undermined fair trading practices. Such pricing strategies can create negative effects on market equality, pressure suppliers, harm small producers, distort competition, and mislead consumers.

Despite no direct financial harm being found to consumers or suppliers, the CCA highlighted the broader implications of TOMMY's pricing strategy, which could destabilize the agricultural and food supply chain. The severity of the infringement warranted the maximum fine under the UTPs Act, which aims to deter similar conduct in the future.