Grocery store, discount – illustrative photo.
Brno – The Office for the Protection of Economic Competition (ÚOHS) will find out in which part of the supply chain from the producer to the seller the price of food is increasing the most. It will focus on four basic foods, the results of the so-called accelerated sector solution will be available in a few months. The office informed about it in a press release. He did not specify which foods he would target. According to the president of the Trade and Tourism Association (SOCR), it will depend on what foods the authority chooses with regard to how they are processed.
“The purpose of the investigation is to find out in which part of the vertical chain from primary producers to food processors to retail chains the greatest increase in margins has occurred and whether there is a dysfunction somewhere in this chain that could be addressed by the authority in terms of competition rules or significant market power,” stated the chairman of the ÚOHS, Petr Mlsna.
At the same time, he pointed out that a high price or an unreasonable margin alone is not an offense against competition law or the law on significant market power. “The authority would have to find evidence of the existence of a cartel agreement or the abuse of a dominant position, or the abuse of significant market power vis-à-vis the supplier aimed directly at increasing the price. A high price or margin may be an indication that such an offense is taking place, but in no case is it unequivocal evidence, ” added the office in a press release.
If during this investigation it discovers signs of possible anti-competitive behavior or abuse of significant market power, it will initiate administrative proceedings. In it, companies can be fined up to ten percent of their annual turnover.
The Agrarian Chamber of the Czech Republic announced today that it wants to ask the antimonopoly office to investigate possible abuse of the market power of the German Schwarz and Rewe groups on the Czech market. Schwarz operates the Lidl and Kaufland retail chains in the Czech Republic, Rewe owns the Penny Market and Billa chains. The chamber says that, along with other retail chains, they control 75 percent of the market, giving them great bargaining power vis-à-vis food and agricultural companies. The Chamber has previously drawn attention to the significant increase in the prices of certain foods in stores. For example, because of the high prices of sugar and eggs, the Minister of Agriculture Zdeněk Nekula (KDU-ČSL) also appealed to traders.
Prouza said that some products, such as sugar, are very easy to process in agricultural production. On the contrary, in the case of butter or cheese, the processing industry is much more involved in the final product. According to him, the entire process from agricultural producers, through processors to traders can be followed, for example, in the case of chicken salami. The choice of monitored products will therefore affect the outcome of the investigation, he added.