Birol Küle, Chair of the Competition Authority, said: “As part of this joint operation, producer/supplier companies coordinate final selling prices and price increase timing of retailers in relation to their own products. Resulting anti-competitive practices Business practices prevent companies from freely setting their prices and raising prices in the marketplace. This leads to an artificial increase and consumers are directly harmed by this situation,” he said.
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13 manufacturers/suppliers, whose pricing behavior was investigated as part of the “supplier investigation” launched by the competition authority in April 2021 and lasting 1.5 years, are breaking the law by joining the “collective distributor” cartel and charging shelf prices identified by companies operating at the retail level. These companies were fined 878 million TL. It was found that 5 chain stores under investigation, which had previously been fined over the same matter, were also parties to the collection-distribution cartel. However, as a fine had been imposed in the previous investigation, the new fine was not imposed.
“5 MARKETS WERE PUNISHED”
Birol Küle, chairman of the competition authority, said that the decision is not the first decision in the fast-moving consumer goods retail sector, saying: “With our board’s decision of October 28, 2021, taken as a result of the investigation known as the ‘chain market investigation’, 1 Collecting and distributing edible oil manufacturing companies and 5 national chain markets. They were found to be parties to the cartel of cartel quality and that the cooking oil manufacturing company also tracked the shelf prices of the companies operating at the retail level, thereby infringing Article 4 of the Law by the above companies and imposing administrative fines on those companies Initiation of the investigation that resulted in the penalties of 13 manufacturers/suppliers, known as the “supply investigation”.
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“MAXIMUM VIOLATION OF COMPETITION”
Noting that both investigations showed that business practices between suppliers and retailers in the FMCG retail sector are designed in such a way that anti-competitive practices can occur, he said:
“In the context of this shared economy, the producer/supplier companies first coordinate the retailers’ final sale prices and price increase times for their own products. present future prices, price increase dates, seasonal activities and promotions to each other. This situation, which we refer to in competition law terminology as a “collection-distribution cartel” and which is one of the most serious anti-competitive violations, eliminates price competition between them companies operating at the retail level and the setting of retail prices by retailers. This situation, defined as resale price determination, also eliminates price competition at the retail level.”
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“CONSUMERS ARE DAMAGED”
Noting that in free competitive markets companies are expected to set their selling prices freely and in competition with each other, the head of the competition authority, Küle, said:
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“Because competition between companies will lower prices, increase the variety and quality of products and services, and ultimately create benefits for consumers. In addition, the creation of competition will indirectly contribute to price stability, economic growth and international competitiveness due to the way they do business, preventing companies from freely setting their prices, artificially increasing prices in the market and consumers directly suffering from this situation.In addition, this has behavior indirectly negative effects on the economy of the country is realized in the fast-moving consumer goods retail sector, which has a high share of the consumer’s budget, such as e.g. becomes even more noticeable. For this reason, it has become imperative for the companies operating in the sector to change their business practices and adapt them to the rules of competition law. We believe that our decisions have sensitized market participants to this topic. As a competition authority, we will continue our efforts to create and maintain an effective competitive environment in markets through investigations and competitive representation.” (DHA)
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