The Hellenic Competition Commission (HCC) within its relevant competences and aiming to thoroughly analyse and investigate the conditions of competition prevailing in critical sectors of the economy, conducted a sector inquiry into production, distribution and marketing of basic consumer goods and in particular food products, as well as cleaning and personal hygiene products.

The sector inquiry focused on eleven (11) product categories, namely: (1) cured meat products, (2) soft drinks - ready-made tea - energy drinks - sodas, (3) powdered laundry detergents, (4) yogurt and yogurt desserts, (5) cereals for breakfast, (6) pasta, (7) coffee, (8) legumes, (9) feta cheese, (10) toilet paper and (11) sliced bread.

In particular, the following were examined:

-the structure of the supermarket supply chain for specific product categories and the regulatory framework governing its operation;

-the emerging changes with the development of e-commerce and the advent of new technologies;

-specific discount practices;

-category management;

-private labels;

-buying alliances for specific basic consumer products and in particular food products;

-as well as the bargaining power of suppliers and supermarkets.

Following the key findings and considerations regarding competition at various levels of the value chain, solutions are proposed. These solutions aim not only to protect consumer surplus in the short term by boosting horizontal competition, but also indirectly increase consumer surplus and economic efficiency in the medium term through the development of innovation, competitiveness and resilience of the supply chain. In the long run, the suggested solutions also aim at strengthening vertical competition in the affected value chains. The suggested solutions are:

a. Adoption of soft law instruments through a hybrid approach to cases of significant bargaining power. Such non-binding legislation can be enacted, for example, through a Code of Conduct or a Good Practice Guide between the parties involved, with respect to the identified problematic practices, which may affect end consumers and/or suppliers. The development and adoption of such best practices can address more effectively and in accordance with the rules of fair competition external costs and supply side problems, especially under the current market conditions created by COVID-19;

b. Possible legislative changes, e.g. amendment to the Rules for the Distribution of Products and the Provision of Services and;

c. Possible introduction of new institutions, such as that of an Ombudsman, appointed by the HCC, which will systematically monitor those markets where significant power of suppliers or buyers is observed. Such new institutions can act as a hub for communication and information on relevant issues affecting the industry and will contribute in general to the audit work of the HCC.

Also, in the difficult and extraordinary conditions that the country is facing (Covid-19), the Ombudsman, with the responsibilities for continuous supervision of the market, could provide information to the HCC for the market situation and for the objective needs of companies in these special economic and social conditions, so that the HCC can provide guidance for practices that, despite the potential for restricting competition, may be necessary for the security of procurement and distribution networks and general reasons of public interest, thus having a positive effect on economic efficiency and the resilience of the supply chain, and which may possibly outweigh potential anti-competitive effects.

You can access the executive summary here.          

The HCC may intervene by applying Articles 1, 2 and 5 to 10 of Law 3959/2011, in order to address problems that harm the effective functioning of competition. In addition, when these tools are not adequate, it may, with a reasoned opinion, take all necessary measures to create conditions for effective competition in this sector of the economy (Article 11 of Law 3959/2011).

Interested parties can either take part at the teleconference organised for this purpose by the HCC in May 2020 and/or submit written comments in the form of a Memorandum, here.