As a result of the Russian Federation’s military aggression supported by the Republic of Belarus and the associated sanctions imposed on these countries, businesses in several sectors are currently facing and may face significant shortages of food and non-food items, as well as raw materials. In addition, consumer demand for certain goods has also increased significantly during this period. Taking into account the current situation, the Competition Council (the CC) explains that even in such circumstances, market participants, including agricultural and food retailers purchasing goods from suppliers, must comply with the principles of fair trade according to the Prohibition of Unfair Trading Practices Law. Namely, even if the suppliers of certain groups of goods cannot fulfil the orders for objective reasons, this is not a sufficient basis for the buyers of the goods to impose unfair sanctions on the suppliers within the meaning of the Prohibition of Unfair Trading Practices Law.
The imposition of unfair and unjustified sanctions is prohibited under the Prohibition of Unfair Trading Practices Law. The law states that "buyers, in cooperation with suppliers of agricultural and food products, including producers, are prohibited from imposing unfair and unjustified sanctions for breach of contract". Under the Prohibition of Unfair Trading Practices Law, non-food retailers with significant market power are also prohibited from imposing unfair and unjustified sanctions on suppliers for breach of contract.
At present, the demand for certain product groups has grown significantly, and the volume of orders for goods is increasing rapidly compared to the regular orders placed in the past. However, there are cases where suppliers are unable to provide the required supply on time or in quantities due to the lack of raw materials or other objective and verifiable circumstances. Therefore, the CC urges market participants who purchase goods from suppliers to comply with the Prohibition of Unfair Trading Practices Law rules and not to impose excessive and prohibited requirements on suppliers, which would negatively affect the entire market.
At the same time, the CC invites suppliers to report to their cooperation partners - buyers of goods - about the lack of raw materials or other objective circumstances due to which the suppliers are unable to provide the required delivery on time or in the specified amount. Furthermore, the CC emphasizes that in such a situation, it is unacceptable that buyers of goods impose contractual penalties or other sanctions on suppliers that are considered unfair and unjustified under the Prohibition of Unfair Trading Practices Law.
The CC invites market participants to inform the competition supervisor of possible prohibited activities in trade and non-compliance with the Prohibition of Unfair Trading Practices Law rules by purchasers of goods, including agri-food retailers, or non-food retailers with significant market power.