The 20 cases relate to unfair trading practices committed by DM in connection with the sale of agricultural and food products.
Background
In April 2024, the AFCA received a tip-off about a letter which DM had sent to a large number of its suppliers. In this letter, DM requested an “OCR bonus” for the digital expansion of its stores, amounting to between 1.5% and 2.5% and starting from 1 May 2024. It also announced that it would be charging the bonus retroactively for the period from 1 January until 30 April 2024. In the AFCA’s opinion, there was no specific consideration from DM in return.
Omni-channel retailing (OCR) is a strategy used in the retail sector where all available sales channels (online and offline) are combined.
The infringements relate to product categories such as soft drinks, tea, plant-based drinks, pickled vegetables, sweets, honey, vegetable oil, spreads, condiments, pasta, children’s snacks and drinks, as well as sports nutrition products.
DM withdrew its requests, with the result that no payments were actually made.
AFCA investigations
In April 2024, the AFCA initiated investigations into alleged unjustified requests for payment in connection with the sale of agricultural and food products. After its investigations confirmed the suspicions, the AFCA filed an application with the Cartel Court to impose appropriate fines in 20 cases. DM cooperated during the investigations.
“As we said after concluding our sector inquiry into the food industry, we at the AFCA prioritise the prosecution of unfair trading practices. Competition also means acting fairly towards less powerful contractual partners on the market,“ explains Director General Natalie Harsdorf.
Breaches of the FWBG
The FWBG prohibits entities from demanding that their suppliers make payments that are unrelated to the sale of agricultural and food products. The FWBG thus protects suppliers that sell agricultural and food products and have weaker bargaining power than buyers, depending on specific turnover thresholds (§ 5a para. 2 FWBG).
On the AFCA’s application, the Cartel Court may impose a fine of up to EUR 500,000. In its application the AFCA requested separate fines for each of the 20 instances in which DM had breached the law.
On the issue of whether simultaneous requests for payment from several suppliers are to be regarded as single infringements that should be penalised individually or as one overall infringement subject to a single penalty, a request for a preliminary ruling is pending at the European Court of Justice.