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Sector Inquiry into the Retail Market


The Serbian Commission for Protection of Competition (the „CPC“ ) announced its intention to conduct an inquiry into the retail market in late November 2016. The announced sector inquiryis now official, as decided by the CPC’s Council on 12 April 2017. Judging by the CPC’s announcement, the upcoming inquiry will be very extensive, as it will cover different markets, a wide array of subject matters and consequently many stakeholders. Following numerous dawn-raids in a previous period, this is further proof that the CPC is increasing its enforcement activity.  


According to the initial announcement in November 2016, the inquiry is driven by the overall importance of the retail market and the competitive conditions in this market for consumers. Another reason is that significant market consolidation following several mergers in the last decade has led to high concentration in the retail market. However, the CPC also appears to be concerned about certain practices on the relevant market that might represent infringements of the Serbian Competition Protection Act (“Official Gazette of RS” no. 51/2009 and 95/2013). As a matter of fact, the CPC is allowed to open a sector inquiry when it believes, based on apparent competitive conditions in a market (e.g. price rigidity or lack of new entrants), that restrictions of competition are possible.

Markets Concerned

The sector inquiry will focus on the retail market, this being the market for the retail sale of mainly food, beverages or tobacco in non-specialized stores on the local, regional and national level and the conditions of competition between retailers on such markets. In addition, the CPC’s sector inquiry will also cover the upstream – wholesale – markets, including both the supply and demand side of these markets, with an emphasis on the relationships between retailers and suppliers.

Subject Matters

First of all, it can be assumed that the CPC will use the opportunity to revisit and, if need be, amend the previously adopted relevant market definitions.

Secondly, the inquiry will be used to assess the market position of each company active in the markets concerned, as well as the relative market strength of suppliers vis-à-vis retailers and vice versa.  We note that similar inquiries in EU have led to the conclusion that, due to various circumstances (such as high market shares, existence of private labels etc.), retail chains appear to have strong bargaining position vis-à-vis suppliers, as they represent a sort of “bottle neck” to suppliers’ products on their journey to consumers, which allows them to impose certain terms of cooperation with suppliers.

Thirdly, the inquiry will focus on the terms and conditions of cooperation between suppliers and retailers. This will include, most importantly, the examination of contracts between suppliers and retailers, shelf-space positioning arrangements, listing and delisting terms (presumably including arrangements regarding all sorts of upfront access payments such as listing fees and delisting practices) and rebate policies. The latter will obviously be analysed in greater detail so as to assess the types and amounts of rebates granted and criteria for qualification.

Fourthly, within the sector inquiry the CPC will also examine the impact of private labels on consumer choice, profitability and the bargaining power of retail chains and suppliers. Hence, the CPC might even examine private label agreements and all the relevant terms of cooperation between retailers and producers.

Finally, the CPC will use this opportunity to review on an ex-post basis the most important concentrations that were realized in the markets concerned in the past.

Parties Involved

In view of the matters to be tackled within the sector inquiry, it appears that numerous stakeholders could be involved. This includes first and foremost the retailers, both the ones present on a nationwide market and the ones present on the local level only. Suppliers, be it producers of FMCG who directly supply retailers or distributors of FMCG, will also be involved. Producers of FMCG may also be involved from another perspective, i.e. private label arrangements with retailers. The CPC may, as it usually does, also approach the relevant public authorities that possess data relevant to the present inquiry (e.g. Statistical Office).

Considering the very broad scope of the sector inquiry it may be expected that the CPC will, at least at the beginning, focus on some of the most important FMCG, which could consequently limit the number of potentially involved parties.

Expected Activities

In inquiries of this kind the CPC usually approaches the parties involved with a request for information, explanations and/or documents, seeking for example disclosure of agreements and correspondence between parties, listing products within certain category and their suppliers, explaining the reasons for cooperating with certain suppliers and terminating cooperation with others, etc. Data and documents could be requested not only for the present but also for the past periods (e.g. for last three years).

Because of the vast amount of data collected, a sector inquiry may and often does result in infringement proceedings against undertakings who the competition regulator suspects have committed certain anti-competitive practices. 


Portrait ofSrđan Janković
Srđan Janković
Raško Radovanović