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Parliamentary committee agrees with objections from food chamber

At their session on February 5, members of the Parliamentary Committee for Agriculture, Environment and Nature Protection agreed to four of five objections submitted by the Slovak Agricultural and Food Chamber (SPPK) to the cabinet-tailored draft amendment to the bill banning “inappropriate conditions" in business relations between retail chains and their suppliers, which the parliament has been dealing with in shortened legislative proceedings, reported the SITA newswire.

At their session on February 5, members of the Parliamentary Committee for Agriculture, Environment and Nature Protection agreed to four of five objections submitted by the Slovak Agricultural and Food Chamber (SPPK) to the cabinet-tailored draft amendment to the bill banning “inappropriate conditions" in business relations between retail chains and their suppliers, which the parliament has been dealing with in shortened legislative proceedings, reported the SITA newswire.

The parliamentary committee turned down only one SPPK requirement which would have prohibited selling food products at a price lower than the total sum of production and transport costs, except for short-term marketing events and the sale of goods approaching their expiry date,SITA wrote.

Three SPPK objections that the parliamentary committee approved concerned removing the term "economic dependency" from the language of the draft amendment. The fourth objection approved by the parliamentary committee related to language stating that invoices payable within 30 days should cover all food products, because in reality food products with longer guarantees can be legally sold. After the guarantee period, longer due dates would mean interest-free financing provided by suppliers to retail chains.

After discussion by the parliamentary committee, SPPK spokesman Stanislav Nemec said that the definition of “economic dependency” in the current law on inappropriate business relations, and mainly the duty to examine economic dependency within the inspection procedure, made the implementation of the law more complicated, since examination of inappropriate conditions is conditioned upon previous proof of economic dependency.

SPPK is concerned that allowing long-term sales at less-than-cost prices because of the refusal of the SPPK objection may spoil the market. SPPK is worried that consumers may start perceiving unrealistically low prices as normal, which then complicates the sale of goods of the same category at prices that correspond with actual costs and a fair margin for businesses involved. SPPK points out that such a ban exists in twelve EU countries.

There are stricter rules effective January 1, 2009 that apply to business relations between suppliers and customers. The law on inappropriate relations in business relations defines as one of the inappropriate relations the sale of goods to final consumers at a price lower than its production or purchase price. If the price is decreased upon agreement between supplier and customer, that constitutes an exception.

In addition, lowering of prices of delivered goods without written justification and without any previous agreement at the expense of suppliers is forbidden by law. The law also forbids unjustified return of goods to suppliers and the unjustified exchange of delivered goods at the expense of the suppliers. A fine of up to €300,000 may be imposed for violation of the law. SITA

Compiled by Zuzana Vilikovská from press reports
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