High Administrative Court dismisses appeal of re-seller LIDL HRVATSKA  
                     

The High Administrative Court of the Republic of Croatia dismissed the appeal of the re-seller LIDL HRVATSKA d.o.o. k.d., Velika Gorica and upheld the ruling of the Administrative Court in Zagreb of 13 April 2023 rejecting the claim for cancellation of the decision of the Croatian Competition Agency (CCA) of 25 November 2021, rejecting at the same time the recovery of the party’s litigation costs. 

Namely, the court of first instance, the Administrative Court in Zagreb, completely rejected the statement of claim of the re-seller LIDL in the administrative dispute against the respondent CCA requesting annulment of its infringement decision of 25 November 2021 and the recovery of the litigation costs. Concretely, the CCA found in the infringement decision concerned that LIDL used its strong bargaining power and imposed unfair trading practices on three suppliers within the meaning of the provisions of the Act on the prohibition of unfair trading practices in the business-to-business food supply chain (UTPs Act). 

Note that despite the fact that the regular quality controls were clearly agreed under the annexes to the SPAs entitled “Quality Control” and ensured by the suppliers at their own cost, the SPAs contained additional provision on quality control entitled “Charges for quality control services”. Under this provision LIDL basically introduced extra charges for quality assurance, a lump-sum payable by the supplier in proportion to the value of the goods. These additional quality control measures were initiated by LIDL in an authorised lab of its choice. Thus, the extra charges for quality assurance have been transferred on the supplier for the quality control agreed between LIDL and the authorised lab of its choice regardless of the results of the quality control. In this case, the supplier was charged for a service that has not been provided, was not real or measurable for the supplier. This provision and practice constitute an unfair trading practice within the meaning of the UTPs Act and a serious infringement of the UTPs Act that lasted for more than one year. 

By this ruling of the High Administrative Court the CCA infringement decision of 25 November 2021 became legally valid. 

*The integral version of the decision of the CCA of 25 November 2021 in the Croatian language and without the parts covered by confidentiality obligation is available here:  https://www.aztn.hr/ea/wp-content/uploads/2022/02/UPI-034-032018-04015.pdf

Croatian Court Upholds Ruling Against LIDL for Unfair Trading Practices

The High Administrative Court of the Republic of Croatia has upheld the ruling of the Administrative Court in Zagreb, which rejected LIDL HRVATSKA d.o.o.'s appeal against the Croatian Competition Agency's (CCA) decision from November 25, 2021. This decision found that LIDL had imposed unfair trading practices on three suppliers, violating the Act on the prohibition of unfair trading practices in the business-to-business food supply chain (UTPs Act).

 The CCA's infringement decision highlighted that LIDL exploited its strong bargaining power by imposing additional charges for quality control services that were not actually provided. Despite having agreed upon regular quality controls, LIDL introduced a provision in the supplier agreements that required suppliers to pay extra charges for quality assurance, regardless of the actual quality control results. This practice was deemed an unfair trading practice and a serious infringement of the UTPs Act, lasting over a year.

 With the High Administrative Court's ruling, the CCA's decision is now legally valid, confirming the agency's stance on protecting suppliers from unfair practices in the food supply chain.



Croatian Court Upholds Ruling Against LIDL for Unfair Trading Practices

The High Administrative Court of Croatia has dismissed LIDL HRVATSKA's appeal against a ruling by the Croatian Competition Agency, confirming that the retailer engaged in unfair trading practices with suppliers.