NEWS

Supermarkets put squeeze on suppliers

Food retailers are once more the focus of inspections by the Competition Committee. According to informed sources, there is to be a large-scale inspection and if irregularities are found, the state is to issue instructions which, if not obeyed, will result in fines that could be as high as 15 percent of turnover. The same sources say that preparations are already under way, and that the committee has been in contact with its counterparts in other European countries. These moves are part of a general war on the high cost of living, attributed to supermarkets entering into agreements with food industries and importers. Supermarket chains put pressure on suppliers to obtain greater discounts, so the price war between these chains as well as their transactions with the suppliers is virtually determined by the size and kind of discount rather than by the actual price suggested by the firms. The suppliers, bearing in mind the pressure, tend to raise prices in order to have a greater margin to negotiate. Therefore all price rises since the beginning of the year are being put under the microscope. This latest drive to bring some order to the retail trade is within the framework of relevant legislation (Article 5, Law 703/1977) that provides for inspections of any sector of the economy and the taking of measures if competition problems are ascertained. A similar process was initiated with regard to fuel prices, where a series of measures to boost competition were recommended, but not adopted by the government.