MODERN FOOD RETAIL AND UNFAIR TRADING PRACTICES
DOI:
https://doi.org/10.5937/ekoPolj1804499PKeywords:
food retail, buyer-supplier relationships, bargaining power, unfair trading practices (UTP), UTP legislationAbstract
The abuse of bargaining power by retailers is reflected in unfair trading practices (UTPs) and there has been a growing interest among EU MSs to address them using regulatory approach and self-regulatory initiatives among market participants. The experiences of ex-YU and neighboring EU MSs are of interest for Serbia. Serbian food suppliers are not protected from UTPs apart from general competition and contract rules and payment terms regulation. Therefore, after a brief review of the global food retail trends and the role of power in the supply chain management in the introduction, the discussion focuses on UTPs and regulatory mechanisms to address them at the EU level, in selected EU MSs and in Serbia. Regarding existing EU and MS practices, it is recommended that Serbia introduce specific UTP regulation in the food supply chain and authorize the Commission for Protection of Competition for the enforcement.
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References
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23. Li, S., Ragu-Nathan, B., Ragu-Nathan, T., & Subba Rao, S. (2006). The impact of supply chain management practices on competitive advantage and organizational performance. Omega, 34, 107-124.
24. Liu, Y., Li, Y., & Zhang, L. (2010). Control mechanisms across a buyer–supplier relationship quality matrix. Journal of Business Research 63(1), 3–12.
25. Maloni, M., & Benton, W.C. (2000). Power influences in the supply chain. Journal of Business Logistics, 21(1), 49-74.
26. McClean, P. (2016). Supermarkets and suppliers take stock of relationships. Financial Times, Retrieved from: https://www.ft.com/content/b1705e06-53de-11e6-befd-2fc0c26b3c60.
27. Moulds, J. (2015). Supermarkets behaving badly – how suppliers can get a fairer deal. The Guardian, retrieved from: https://www.theguardian.com/small-businessnetwork/2015/ jun/25/tesco-supermarkets-behaving-badly-suppliers.
28. Noble, D. (1997). Purchasing and supplier management as a future competitive edge. Logistics Focus, 5(5), 23–27.
29. OECD. (1998). Buying Power of Multiproduct Retailers. Competition Policy Roundtables. Aide-memoire of the Discussion DAFFE/CLP(99)21. Committee on Competition Law and Policy.
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31. Podgoršek, J. (2015). Development of retail chains in Slovenia [in Serbian: Razvoj trgovačkih lanaca u Sloveniji]. V Agricultural Forum Food for Europe, Panel V. Economic Institute, Subotica, Retrieved from: http://www.ecinst.org.rs/ sites/default/ fles/prezentacije/dr_joze_podgorsek.pdf.
32. Reardon, T., Timmer, P., & Berdegué, J. (2004). The Rapid Rise of Supermarkets in Developing Countries: Induced Organisational, Institutional, and Technological Change in Agrifood Systems. Journal of Agricultural and Development Economics, 1(2), 15-30.
33. Renda, A., Cafaggi, F., Pelkmans, J., Iamicelli, P., Correia de Brito, A., Mustilli, F., & Bebber, L. (2014). Study on the Legal Framework Covering Business-tobusiness Unfair Trading Practices in the Retail Supply Chain. EC, Final Report, https://doi:10.2780/91447.
34. Romanian Competition Council - RCC. (2013). Document of Reply in the Consultation by the EC on the Green Paper on UTP in the B2B Food and Non-Food Supply Chain in Europe, Retrieved from: http://ec.europa.eu/ internal_ market/consultations/2013/unfair-trading-practices/docs/contributions/public-authorities/romanian-competition-council_en.pdf.
35. Stamm, A. (2004). Wertschöpfungsketten entwicklungspolitisch gestalten. Anforderungen an Handelspolitik und Wirtschaftsförderung. Konzeptstudie. Eschborn: Deutsche Gesellschaft fur Technische Zusammenarbeit GmbH.
36. Swinnen, J., & Vandevelde, S. (2017). Regulating UTPs: diversity versus harmonisation of Member State rules. In Di Marcantonio, F. and Ciaian, P. (Eds), Unfair trading practices in the food supply chain: A literature review on methodologies, impacts and regulatory aspects. EC JRC, Luxembourg, 39-59.
37. The Agricultural Markets Task Force - AMTF. (2016). Improving Market Outcomes. Enhancing the position of farmers in the supply chain. Brussels.
38. The Commission for Protection of Competition of the Republic of Serbia - CPC. (2018). Sector market inquiry into the retail sale in non-specialized stores with food, beverages and tobacco predominating - Phase I. Belgrade, Retrieved from http://www.kzk.gov.rs/kzk/wp-content/uploads/2018/06/Retail-ENG.pdf.
39. The Supply Chain Initiative - SCI. (2018). Regional/national supporting initiatives, Retrieved from: http://supplychaininitiative.eu/regionalnational-supportinginitiatives (January 18, 2018).
40. Van der Vorst, J. G. A. J. (2000). Effective Food Supply Chains: Generating, Modelling and Evaluating Supply Chain Scenarios. PhD-thesis, Wageningen University, Wageningen.
41. Velő, Z., & Bors, E. (2015). Unfair practices in distribution. Slovenian Competition Day 2015, Panel 3. SCPA, Ljubljana, Retrieved from: http://www. varstvokonkurence.si/fleadmin/varstvo-konkurence.si/pageuploads/2015_ Slovenski_dan_varstva_konkurence/Panel_3_Edina_Bors.pdf.
42. Wortmann, M. (2010). Einzelhandel - eine äußerst begrenzte Europäisierung. Wirtschaftsdienst Sonderheft, 13, 65-70, DOI: 10.1007/s10273-010-1036-2.
2. Benton, W.C., & Maloni, M. (2005). The influence of power driven buyer/seller relationships on supply chain satisfaction. Journal of Operations Management, 23(1), 1-22.
3. Brown, O., & Sander, C. (2007). Supermarket Buying Power: Global supply chains and smallholder farmers. The IISD, Winnipeg, Manitoba, Canada.
4. Cafaggi, F., & Iamiceli, P. (2018). Specifc regulations on Unfair Trading Practices in Member State in the Business-to-Business Retail Supply Chain. Study – Overview. EC Impact assessment, Annex F. Commission Staff Working Document, Brussels, SWD(2018) 92 final.
5. Chauve, P., Parera, A., & Renckens, A. (2014). Agriculture, Food and Competition Law: Moving the Borders. Journal of European Competition Law & Practice, 5(5), 304-313, https://doi:10.1093/jeclap/lpu020.
6. Christopher, M. (2005). Logistics and Supply Chain Management. Prentice Hall. 7. CIAA-AIM (2011). Unfair commercial practices in Europe. Dedicated Research, Retrieved from: http://ec.europa.eu/internal_market/consultations/2013/unfairtrading-practices/docs/contributions/registered-org/federacion-espanola-deindustrias-dealimentacion-y-bebidas-fab-2-annex_es.pdf.
8. Consumers International (2012). The relationship between supermarkets and suppliers: What are the implications for consumers? Summary of the main report.
9. Cox, A. (2001). Managing with power: strategies for improving value appropriation from supply relationships. Journal of Supply Chain Management, 37(2), 42-47.
10. Deloitte. (2017). Global Powers of Retailing 2017. The art and science of customers.
11. Drašković, B., & Domazet, I. (2008). Market power concentration – a form of market imperfection [in Serbian: Drašković, B., & Domazet, I. (2008). Koncentracija tržišne moći kao izraz nesavršenosti tržišta]. In Drašković, B.,Vuković, V. (Eds.). Market Structures and Protection of Competition: Experiences of Countries in Transition. Institute of Economic Sciences, Banking Academy, Belgrade, 45-83.
12. European Commission - EC. (2014). Communication from the Commission to the European Parliament, the Council, the EESC and the Committee of the Regions. Tackling unfair trading practices in the business-to-business food supply chain. Strasbourg, COM(2014) 472 final.
13. European Commission - EC. (2016). Report from the Commission to the European Parliament and the Council on unfair business-to-business trading practices in the food supply chain. Brussels, COM (2016) 32 final.
14. European Commission - EC. (2017). Initiative to improve the food supply chain. Inception Impact Assessment. Ref. Ares (2017)3735471 - 25/07/2017.
15. European Commission - EC. (2018a). Initiative to improve the food supply chain (unfair trading practices). Impact assessment. Commission Staff Working Document, Brussels, SWD (2018) 92 final.
16. European Commission - EC. (2018b). Proposal for a Directive of the European Parliament and of the Council on unfair trading practices in business-to-business relationships in the food supply chain, Brussels, COM(2018) 173 final.
17. Fałkowski, J. (2017). The economic aspects of unfair trading practices: measurement and indicators. In Di Marcantonio, F. and Ciaian, P. (Eds), Unfair trading practices in the food supply chain: A literature review on methodologies, impacts and regulatory aspects. EC JRC, Luxembourg, 20-38.
18. Glöckner, J. (2017). Unfair trading practices in the supply chain and the coordination of European contract, competition and unfair competition law in their reaction to disparities in bargaining power. Journal of Intellectual Property Law & Practice, 12(5), 416-434, https://doi.org/10.1093/jiplp/jpx035.
19. Hernández-Espallardo M., & Arcas-Lario N. (2003). The effects of authoritative mechanisms of coordination on market orientation in asymmetrical channel partnerships. International Journal of Research in Marketing, 20(2), 133–152.
20. Hilty, R. M., Henning-Bodewig, F., & Podszun, R. (2013). Comments of the Max Planck Institute for Intellectual Property and Competition Law, Munich of 29 April 2013 on the Green Paper of the European Commission on Unfair Trading Practices in the Business-to-Business Food and Non-Food Supply Chain in Europe Dated 31 January 2013, Com(2013) 37 Final. International Review of Intellectual Property and Competition Law, 44(6), 701-709.
21. Kelava, M. (2017). By the law against unfair trading practices [in Croatian: Zakonom protiv nepoštenih trgovinskih praksi] H-Alter, retrieved from: http://www.h-alter.org/vijesti/prema-regulaciji-nepostenih-trgovackih-praksi.
22. Kotler, P., & Keller, K. L. (2012). Marketing Management. 14th ed. Prentice Hall, Upper Saddle River, New Jersey.
23. Li, S., Ragu-Nathan, B., Ragu-Nathan, T., & Subba Rao, S. (2006). The impact of supply chain management practices on competitive advantage and organizational performance. Omega, 34, 107-124.
24. Liu, Y., Li, Y., & Zhang, L. (2010). Control mechanisms across a buyer–supplier relationship quality matrix. Journal of Business Research 63(1), 3–12.
25. Maloni, M., & Benton, W.C. (2000). Power influences in the supply chain. Journal of Business Logistics, 21(1), 49-74.
26. McClean, P. (2016). Supermarkets and suppliers take stock of relationships. Financial Times, Retrieved from: https://www.ft.com/content/b1705e06-53de-11e6-befd-2fc0c26b3c60.
27. Moulds, J. (2015). Supermarkets behaving badly – how suppliers can get a fairer deal. The Guardian, retrieved from: https://www.theguardian.com/small-businessnetwork/2015/ jun/25/tesco-supermarkets-behaving-badly-suppliers.
28. Noble, D. (1997). Purchasing and supplier management as a future competitive edge. Logistics Focus, 5(5), 23–27.
29. OECD. (1998). Buying Power of Multiproduct Retailers. Competition Policy Roundtables. Aide-memoire of the Discussion DAFFE/CLP(99)21. Committee on Competition Law and Policy.
30. Petrov, A. (2015). Bulgaria: New Regulation against Abuse of Economic Dependence. Global Compliance News, Retrieved from: http://globalcompliance news.com/bulgaria-new-regulation-against-abuse-of-economic-dependence-20150713.
31. Podgoršek, J. (2015). Development of retail chains in Slovenia [in Serbian: Razvoj trgovačkih lanaca u Sloveniji]. V Agricultural Forum Food for Europe, Panel V. Economic Institute, Subotica, Retrieved from: http://www.ecinst.org.rs/ sites/default/ fles/prezentacije/dr_joze_podgorsek.pdf.
32. Reardon, T., Timmer, P., & Berdegué, J. (2004). The Rapid Rise of Supermarkets in Developing Countries: Induced Organisational, Institutional, and Technological Change in Agrifood Systems. Journal of Agricultural and Development Economics, 1(2), 15-30.
33. Renda, A., Cafaggi, F., Pelkmans, J., Iamicelli, P., Correia de Brito, A., Mustilli, F., & Bebber, L. (2014). Study on the Legal Framework Covering Business-tobusiness Unfair Trading Practices in the Retail Supply Chain. EC, Final Report, https://doi:10.2780/91447.
34. Romanian Competition Council - RCC. (2013). Document of Reply in the Consultation by the EC on the Green Paper on UTP in the B2B Food and Non-Food Supply Chain in Europe, Retrieved from: http://ec.europa.eu/ internal_ market/consultations/2013/unfair-trading-practices/docs/contributions/public-authorities/romanian-competition-council_en.pdf.
35. Stamm, A. (2004). Wertschöpfungsketten entwicklungspolitisch gestalten. Anforderungen an Handelspolitik und Wirtschaftsförderung. Konzeptstudie. Eschborn: Deutsche Gesellschaft fur Technische Zusammenarbeit GmbH.
36. Swinnen, J., & Vandevelde, S. (2017). Regulating UTPs: diversity versus harmonisation of Member State rules. In Di Marcantonio, F. and Ciaian, P. (Eds), Unfair trading practices in the food supply chain: A literature review on methodologies, impacts and regulatory aspects. EC JRC, Luxembourg, 39-59.
37. The Agricultural Markets Task Force - AMTF. (2016). Improving Market Outcomes. Enhancing the position of farmers in the supply chain. Brussels.
38. The Commission for Protection of Competition of the Republic of Serbia - CPC. (2018). Sector market inquiry into the retail sale in non-specialized stores with food, beverages and tobacco predominating - Phase I. Belgrade, Retrieved from http://www.kzk.gov.rs/kzk/wp-content/uploads/2018/06/Retail-ENG.pdf.
39. The Supply Chain Initiative - SCI. (2018). Regional/national supporting initiatives, Retrieved from: http://supplychaininitiative.eu/regionalnational-supportinginitiatives (January 18, 2018).
40. Van der Vorst, J. G. A. J. (2000). Effective Food Supply Chains: Generating, Modelling and Evaluating Supply Chain Scenarios. PhD-thesis, Wageningen University, Wageningen.
41. Velő, Z., & Bors, E. (2015). Unfair practices in distribution. Slovenian Competition Day 2015, Panel 3. SCPA, Ljubljana, Retrieved from: http://www. varstvokonkurence.si/fleadmin/varstvo-konkurence.si/pageuploads/2015_ Slovenski_dan_varstva_konkurence/Panel_3_Edina_Bors.pdf.
42. Wortmann, M. (2010). Einzelhandel - eine äußerst begrenzte Europäisierung. Wirtschaftsdienst Sonderheft, 13, 65-70, DOI: 10.1007/s10273-010-1036-2.
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Published
2018-12-28
How to Cite
Popović, V., Mihailović, B., & Simonović, Z. (2018). MODERN FOOD RETAIL AND UNFAIR TRADING PRACTICES. Economics of Agriculture, 65(4), 1499–1511. https://doi.org/10.5937/ekoPolj1804499P
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Review articles
