VILNIUS — Lithuania’s parliament passed an amendment to the Competition Law yesterday stipulating that a company controlling more than 30 percent of a market or three companies controlling more than 55 percent will face increased regulation and possible fines.
The measure passed but only 56 of the 141 members of the Seimas voted in favor and despite President Dalia Grybauskaitė’s ardent support of competition law reform, her chief economic adviser expressed trepidation toward the bill.
“The number of people that voted for this was very small,” Nerijus Udrėnas, Grybauskaitė’s economic adviser, told Baltic Reports. “We will have internal investigations once we receive it … I’m not happy about this personally. We will give the president all the arguments and she will make a decision. It’s our job to inform her of all the implications.”
The new market threshold limit this amendment would enact if signed by the president will only apply to one economic sector — retail — given current market conditions. Thirty-six percent of the Lithuanian retail market is controlled by Maxima LT. Udrėnas said passing a law that singled out one sector like this was not ideal.
“We’ll see if there are more general ways to see if there’s more competition , rather than addressing only sector,” Udrėnas told Baltic Reports. “The concern is that retail is singled out … we want to be a country that passes good legislation.”
Udrėnas and the rest of Grybauskaitė’s team of advisers will examine the bill and discuss it with the president next week.
Maxima LT spokesperson Renata Saulyte told Baltic Reports the company does not consider itself monopolistic regardless of what politicians allege. Photo by Nathan Greenhalgh.
Unfairly targeted
The bill’s passage drew the ire of Maxima LT, a subsidiary of the privately-held VP Grupė organization. The company’s general director decried the bill when speaking to the media.
“You do not need to be an expert to realize that … is directed against a single retail company, Maxima LT,” Maxima LT General Director Gintaras Jasinskas told Verslo Žinios yesterday. “This, I believe, is an open attempt to disrupt the Maxima trade network.”
The company and the Association of Lithuanian Trade Enterprises, which represents Maxima LT as well as many of its competitors, told Baltic Reports they do not consider Maxima LT to have a monopoly on the country’s retail market.
If signed, the bill would impose intensive regulation and possible fines on companies exceeding the market control threshold. The government would examine closely if such a company is conducting anti-competitive practices.
Meanwhile Maxima LT recently announced that it’s sales had dropped nine percent in the second quarter of this year, about 122 million litai (€35 million).
