Carrefour Polska Faces Allegations of Unfair Contractual Practices
Carrefour Polska is under scrutiny from the Polish competition authority for allegedly exploiting its contractual advantage over suppliers of agricultural products.
11.09.2023 | Polish competition authority
Carrefour Polska has been accused by Tomasz Chróstny, the President of the Polish competition authority, of unfairly leveraging its contractual advantage against suppliers of agricultural products. The allegations center around the unjustified collection of fees from suppliers for transporting goods from the central warehouse to the stores.
The Polish competition authority is actively monitoring the relationships between large retail chains and their suppliers in the agricultural sector. This scrutiny has led to the publication of two reports: one detailing discounts offered by retail chains and the other addressing sales-related fees charged to suppliers for services associated with the sale of goods. A specific unfair practice highlighted in the reports involves demanding fees from suppliers for the delivery of products from central warehouses to individual retail stores.
According to the President of the Polish competition authority, central distribution is a fundamental aspect of retail chains' business models, and it is unacceptable to charge suppliers for transportation from the main warehouse to stores. This practice effectively shifts the costs of the retailer's operations onto the suppliers, which may constitute an unfair exploitation of contractual advantage. Carrefour Polska could face a penalty of up to 3% of its annual turnover for such practices.
The operation of hundreds of stores relying on daily deliveries from multiple suppliers would be unfeasible or unprofitable without centralization, which allows retail chains to negotiate favorable trading conditions through economies of scale. This centralization is a key pillar of modern distribution channels and the success of retail chains, making it a natural element of their business model.
Carrefour Polska's interest lies in distributing goods to its stores, even if it does not receive payment for this service. However, findings from the Polish competition authority's investigations indicate that there are entities in the market that perform delivery tasks from distribution centers to retail outlets at their own expense. This suggests that by charging suppliers for transportation from central warehouses to stores, Carrefour Polska may be passing on its operational costs to suppliers, which could be a sign of unfair exploitation of contractual advantage, risking a penalty of up to 3% of the company's annual turnover.
This is not the only investigation concerning fees for transporting goods from central warehouses to retail stores. Previously, the Polish competition authority also accused Auchan Polska of unfairly exploiting its contractual advantage.