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Inflation: Recommendations Issued to Food Traders

The Competition Authority (AdC) issued recommendations on the performance of food traders, including price fixing, suggesting a periodic review of commercial action to prevent “risky behaviours” along the price chain.

Pricing recommendations for consumer goods, in particular food, released from the competition regulator, and available on its website, aim to raise awareness among companies of the importance of adopting market strategies aligned with best competition practices.

“This is crucial to ensure the effective functioning of markets, contributing to fair and competitive prices paid by households in the current economic circumstances.”

The regulator recommends that operators periodically review their commercial activities to prevent risky behaviour, taking into account, inter alia, that it is illegal to impose resale prices and exchange, directly or indirectly, strategic and commercially sensitive information, even in promotional contexts.

It also recalls that margins along the price chain should not be guaranteed at the expense of price sharing between companies and that “retail price monitoring (PVP) tools should not be used as a coordination and pricing tool. And, that it should be noted that temporary disruptions of supply chains or any form of public price announcement should not be used to conceal or camouflage practices restricting competition.

From a preventive perspective, and based on the experience gained, the AdC identifies potential risk behaviours for competition to be avoided by economic agents, and clarifies which are prohibited by the Competition Law, including those that may arise in the context of relations between suppliers and distributors, using examples.

The statement also addresses the limits of legality in the performance of companies regarding the management of communication between suppliers and retailers, focusing on the vertical fixing of resale prices and the horizontal alignment of (PVP) achieved by retailers through the intervention (and prices) of suppliers.

At a hearing on Tuesday in the Committee on Agriculture and Fisheries, the AdC assured MPs of their intention to exercise their powers under the zero VAT pact of essential foods, which comes into force on the 18th of April.

“This authority will exercise its powers so that this cannot be used to distort competition,” said Miguel Moura e Silva, a member of the AdC’s Board of Directors.

To contain the impact of inflation, the Mainland Government has launched a set of measures, such as the application of 0% VAT, which will cost about 600 million euros.

Samantha Gannon

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