The Competition Council (KP) has imposed a fine of 1.873 million euros on retail chain SIA Maxima Latvija for violations of the Unfair Trading Practices Prohibition Law and has set a number of legal obligations for the company, according to the decision published by KP.
The decision states that Maxima Latvija applied unfair trading practices in its cooperation with suppliers both before and after the Unfair Trading Practices Prohibition Law entered into force—indicating the long-term nature of such conduct.
KP also concluded that the retailer’s unfair behaviour was aimed at strengthening its own competitiveness at the expense of agricultural and food product suppliers.
As a result of the identified violations, Maxima Latvija must ensure non-discriminatory and fair treatment of suppliers, including an effective, transparent and traceable negotiation process for purchase prices.
The company is required to ensure that suppliers clearly understand when negotiations relate to purchasing price changes, as well as to begin discussions and offer suppliers the possibility to agree on mutually clear, proportionate, and balanced deadlines for reviewing purchase prices. If Maxima Latvija initiates a price change, the approval deadline for the new price may not be shorter than what is set in the cooperation agreement, unless both parties agree otherwise in writing. If no agreement is reached within six months, the existing contractual conditions must remain in force, and
Maxima Latvija may not interpret or apply them in a way that would allow unilateral changes in its favour.
The company must also evaluate and respond within contractual deadlines to justified supplier requests to increase prices due to changes in taxes or equivalent payments directly applicable to specific goods, such as deposit fees.
Maxima Latvija is prohibited from demanding lower purchase prices than the current ones when a supplier requests a price increase. In other words, when a supplier proposes a price increase, the retailer may not respond by demanding an even lower price for the same goods.
If no agreement is reached on the price of a specific product, the company may not apply punitive measures to the supplier’s other goods, such as blocking products, removing them from the assortment, halting orders, or cancelling promotional participation.
All price proposals, agreements, and decisions must be documented in writing
or in a traceable electronic format and stored for at least one calendar year to ensure transparency and traceability.
According to KP, Maxima Latvija systematically and over a long period used its market power to unilaterally set purchase prices for several agricultural and food suppliers, including delaying price approvals and prolonged suspension of orders. Such actions strengthened imbalance in contractual relations, limited suppliers’ ability to independently plan their business development, and reduced their capacity to invest in growth and competitiveness.
Although the case did not focus on whether price reductions were passed on to consumers, KP found indications that Maxima Latvija did not transfer the benefits of reduced purchase prices to consumers but instead absorbed the gains within its supply chain.
KP noted that due to a high “fear factor” among suppliers in the daily consumer goods market in Latvia, maintaining trust in the supervisory authority is essential—especially in cases where the affected party is protected by special regulation.
Since the violations lasted more than one year but less than five years
(from the 1st of November, 2021, when the law entered into force), the Council applied a fine increase of up to 0.02%.
As previously reported by LETA, Maxima Latvija intends to appeal the decision. The company said that Latvian law does not restrict a retailer’s right to negotiate commercial terms or refuse to purchase goods if the price offered is unacceptable, adding that it has always focused on offering low prices to customers and conducts respectful cooperation with suppliers.
Last year, Maxima Latvija posted a turnover of €1.102 billion (+2.6% year-on-year) and a profit of €50.775 million (-10.2%).
The company, registered in November 2000, is owned by Lithuanian companies Maxima grupe and Maxima LT, which are part of the Vilniaus prekyba business group controlled by Nerijus Numavičius.
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