New law requires shops to police their customers

DISCIPLINED, hygiene-aware customers – with shop workers looking over their shoulders to keep them from straying – could be one effect of a recent package of laws affecting retailers which the government says will protect consumers who use food shops.

An approved bakery product retrieval technique. An approved bakery product retrieval technique. (Source: SME)

DISCIPLINED, hygiene-aware customers – with shop workers looking over their shoulders to keep them from straying – could be one effect of a recent package of laws affecting retailers which the government says will protect consumers who use food shops.

One of the most visible impacts of the recent revision to the Foodstuffs Act is that customers in Slovak outlets will no longer be allowed to touch unpackaged bakery products with their bare hands. Instead, they must don plastic gloves or use tongs to pick up rolls and loaves. However, if they fail to do so it is the merchant who will be held responsible under the law. The legislation also obliges merchants to sell bakery products from covered boxes to prevent airborne contamination of food; they must also provide detailed information about the ingredients of food sold by the slice or portion.

Retailers have been quick to object to the new rules, saying that the new legislation would effectively turn them into ‘bakery police’, trying to regulate the hygienic behaviour of their customers. They suggest that a nationwide education campaign should have preceded the adoption of the law.

The Food Chamber of Slovakia (PKS) and the Association of Trade and Tourism (ZOCR) has said that the revision to the Foodstuffs Act was in fact just the latest in a series of onerous new laws inflicted on them by the government over the past year or so. Some of the recent laws affecting retailers have not only complicated their lives but have had a negative impact on the consumers that the laws were ostensibly designed to protect, the ZOCR said. Its comments were echoed by the PKS, which declared that “the latest regulations significantly deteriorate the business environment” by damaging market mechanisms and disrupting economic competition.

The laws that merchants affiliated with the PKS and the ZOCR have in mind include the law on inadequate conditions in commercial relations, the Packaging Act, the hike in excise duty on spirits, and legislation to favour sale of certain products direct from farms.

Merchants also object that their voices have not been heard or considered as lawmakers passed the most recent legislation via fast-tracked procedures.

The law on inadequate conditions in commercial relations, which was described by the Fico government as an effective tool to "eliminate inapt conditions" in the relationship between suppliers and large purchasers, has met with fierce criticism from retailers.

The Ministry of Economy drafted the legislation, which came into effect last year, in response to the concerns of suppliers who said they were significantly disadvantaged in their relationships with large retail chains.

The legislation regulates the way contracts are concluded between retailers and suppliers, discount practices, and the return or exchange of goods to suppliers at their own cost.

These measures regulate conditions of trade in a negative, one-sided way to the benefit only of sellers, Martin Katriak, deputy chairman of the board of directors of retail chain COOP Jednota, told The Slovak Spectator. He objected to the law’s unambiguous stipulation that inadequate conditions can emerge only as a result of a retailer’s actions and not vice versa. According to Katriak, the recently adopted laws suggest a long-term negative attitude by those in powers towards retailers.

“The retailer in fact does not have an option to negotiate the price, or work with the price – and I am stressing the word negotiate, not dictate,” Katriak told The Slovak Spectator.

The law applies to the sale of products or services to end-consumers at prices lower than their production cost or the purchase price for which the goods were supplied to the retailer. It prohibits this practice in principle, though prices may still be trimmed on the basis of a specific agreement between the supplier and the retailer.

Katriak said that the law is “unambiguously bad and discriminates against retailers”.

Jozef Orgonáš, general secretary of ZOCR, said that the law interferes in an unprecedented way in the freedom of businesses to shape modern supplier relations. Orgonáš also insisted that the retailers were not given a chance to comment on the legislation.

“We are fundamentally against the adoption of such an important law without a preceding public discussion,” Orgonáš told The Slovak Spectator. “It was a deputies’ draft tailored to order, moreover in an amateurish way.”

According to Katriak, the paradox of the legislation is that while it is intended to protect Slovak food production, the contrary will be true. He says that the law defines such tough conditions for retailers that if they want to comply with the legislation without threatening the essence of their business they will have to turn to suppliers outside Slovakia.

“It is interesting that producers from beyond the Morava [River], the Danube or the Tatras have a similar feeling and are approaching retailers with lucrative offers,” Katriak said, adding that the retailers have so far rejected these offers.

In terms of the impact that the amended Foodstuffs Act will have on the operations of retailers, Orgonáš has said that they are, with some exemptions, prepared to apply the law. Most of the tools, such as plastic bags, gloves and tongs that the law defines are already used by retailers, he added.

However, Orgonáš objected to the philosophy of the law: he said that in this part of Europe it is simply not the habit to sell bakery products and bread pre-packaged. To package such products would require a change in technology and would mean that such products lose some of their taste, according to Orgonáš.

“The Slovak customer wants to pick his bakery goods by hand and it is up to society to create an understanding that this should not be done with bare hands,” Orgonáš said. “The retailers will create the technical conditions.”

Orgonáš added that opportunities to control customers are limited because customers warned about their conduct could become aggressive, something which he said had already been proven in practice.

“However, the retailers will pay the fines and this is why they must fulfil the role of policemen,” Orgonáš said.

Katriak also commented that it is unclear how merchants will control customers, because there is no regulation allowing them to penalise customers caught touching food with their bare hands.

According to Orgonáš, the law’s passage on March 1, 2010, without a debate involving professionals, and then its enforcement date arriving only two months later, in May 2010, was abnormal. Retailers said they would prefer the validity of the law to be delayed until January 2012.

According to Katriak, the nature of the law did not justify the fast-tracked legislative procedure used to pass it since there has not been any epidemic recorded in Slovakia. Katriak suggested that the Foodstuffs Act amendment will affect as many as 40,000 retailers in Slovakia.

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