On June 16, 2025, the Latvian Administrative Regional Court upheld the Competition Council's (KP) decision regarding the imposition of fines on companies SIA “BALTSTOR” and LENOKA SIA. This ruling comes after the Senate declined to initiate cassation proceedings on November 28, 2024, thereby affirming that the actions of these retailers violated the law prohibiting unfair retail practices.

The KP found that the companies systematically imposed unfair and unjustified contractual penalties on food suppliers, particularly in cases where suppliers had timely notified them of non-delivery or when the penalties exceeded the contractually agreed amounts. Each company was fined 0.05% of their net turnover for 2016, taking into account the severity, duration, and mitigating circumstances of the violation.

This legal case has spanned nearly seven years and has been reviewed four times by the Administrative Regional Court. Although the Senate annulled a previous ruling regarding the fines on December 28, 2024, the Administrative Regional Court, in its June 16, 2025 ruling, reaffirmed the legality and justification of the KP's decision for the fourth time.

The court emphasized that the amount of contractual penalties must be clearly ascertainable from the contract terms, avoiding situations where penalties become unknown and unpredictable. Penalties must be clearly defined and justified based on understandable criteria, such as the nature of the violation, the culpability of the supplier's actions, and the regularity of the violations. The court also noted that a penalty could be deemed unfair even if it formally complies with the Civil Code provisions.

Ieva Šmite, acting chairperson of the Competition Council, stated, “This ruling clarifies the standards of fair commercial practices in food retail. The court has reiterated that retailers cannot impose penalties that are not clearly justified and proportionate. This is a significant message not only for this specific case but for the entire industry – contract terms must be transparent and understandable to protect all market participants.”

The ruling on the fines can still be appealed to the Senate's Administrative Cases Department within one month from the date of the ruling.

The decision made by the Competition Council is available on their official website.