Poland's competition regulator has announced the opening of an investigation into the retailer. A possible fine can reach 3% of annual turnover.
Jerónimo Martins is being investigated in Poland for suspected unfair commercial practices. The country’s competition authority, UOKiK, announced this Wednesday in a statement and explains that the company risks a fine equivalent to 3% of annual turnover.
Information gathered in June during an audit of Jeronimo Martins Polska (JMP) led UOKiK to accuse the company of using unfair contractual advantage. The investigation focuses on contracts with suppliers, in particular of fruit and vegetables.
According to the regulator, the subsidiary of Jerónimo Martins – owner of the Biedronka supermarket chain in Poland – has contractually agreed with suppliers two types of discounts on product prices. The first, in percentage, applies depending on the turnover and the limits are established.
When this amount is exceeded, the second discount comes in. The problem is that this is only known at the end of the month. If suppliers refuse, they face a contractual penalty. The regulator thus questions whether Jerónimo Martins is using the strongest negotiating position improperly.
“Jeronimo Martins Polska has a stronger negotiating position and we suspect they are using it unfairly. As a result of these activities, suppliers of food products, mainly fruit and vegetables, are not sure if they will have to give an additional discount and how big they are. Thus, when entering into a contract, they do not know how much they will receive,” explained the regulator, adding that this is another action to “improve the situation of farmers”.