Food Processors and Producers Reach Good Business Practice Agreement With Retailers
After long and acrimonious discussions, food processors and producers managed to get the supermarket and hypermarket operators sign a joint Code of Good Business Practice, which is hoped to bring about a long-term drop in the retail prices of food items sold in supermarkets
After long and acrimonious discussions, food processors and producers managed to get the supermarket and hypermarket operators sign a joint Code of Good Business Practice, which is hoped to bring about a long-term drop in the retail prices of food items sold in supermarkets.
The Code will come into force after the Competition Council will analyze its compliance with the relevant legislation.
The signing ceremony conducted at the Ministry of Agriculture headquarters puts an end to a war started back in May this year, when producers accused supermarket chains they abused their dominant position and levied excessive taxes on producers who wanted their merchandise marketed in the supermarkets.
The minister of agriculture Dacian Ciolos mediated the talks between the two warring parties and said the document resulted from those talks could render the business practice more transparent to the public and even prompt long-term drop in retail prices.
"It is an important step towards a more civilized and transparent retail business, including the one conducted in these massive retail networks,” said Ciolos.
Sorin Minea, president of the business association Romalimenta, spoke for the food processors part, stating that that "A drop in retail prices should show up in three to four months.”
The producers think one of the most important clauses in the document they signed was the one forbidding retailers to prevent food processors to sell their produce to other retailers, at similar prices. Another important item in the document maps the way selling price should be computed, allowing for an open negotiation among food producers and retailers, "which will led to a healthy competition environment.” states the Code of Good Practice
According to the document, retailers are bound to notify producers prior to take out their products from the shelves; also, they are prevented from passing on the producers the costs of marketing the products or opening new stores or extending of existing ones.
For their part, producers are also kept from asking retailers to shoulder their marketing prices or keep certain level of prices for their products.
According to the agreement, the retailers are requested to not delay over 30 days the pay of the merchandise to producers, or else they face penalties.