TALLINN — Estonian food producers are becoming increasingly vocal about alleged anti-competitive practices employed by large supermarket chains in the country that they say make it very hard to earn a profit.
A similar situation in Lithuania prompted the government to pass a wholesale reform law this spring, restricting retail chains from forcing certain fees upon suppliers, with penalties of higher taxes and stiff fines to give it teeth. No longer will retailers be able to [private_supervisor]charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell. In small countries like the Baltic states where the retail is dominated by a handful of large chains, reform like this has a profound effect on the market. [/private_supervisor] [private_subscription 1 month]charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell. In small countries like the Baltic states where the retail is dominated by a handful of large chains, reform like this has a profound effect on the market.
However, in Estonia no such legislation is being put forward by the Reform-IRL coalition, so producers are bringing media attention to the situation, specifically on fines imposed by the supermarkets on producers for exiguous delivery errors.
In statements to the Äripäev business newspaper, a number of producers complained that anyone supplying to the large Rimi supermarket chain is forced to pay €450 fine if there is any written error on sales documents or they have not reported about the any net weigh changes 30 days in advance, even if the delivery is delayed. As Estonian producers do not have much chances to sell their goods elsewhere, they have little choice but to play by the chains’ rules.
Anti Orav, CEO of Põltsamaa Felix food products company said that if producers fail to meet 98 to 100 percent of Estonian chains’ supply assurance requirements on orders, they face fines.
“This is plausible in situations where the orders were sent in earlier, but at this moment they require this kind of supply assurance even with only 24-hour notice,” Orav told Äripäev.
Orav added that much of his company’s sales become worthless after fines are imposed for late delivery or slight differences in net weight.
Estonian retail chains denied that they are abusing their position in the market. Evelin Mägioja, marketing director at Rimi Eesti told Äripäev that his company is merely ensuring that consumers get the goods they want, and last year’s 61 million krooni (€3.8 million) loss is proof that Rimi is not charging producers anything exorbitant. [/private_subscription 1 month] [private_subscription 4 months]charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell. In small countries like the Baltic states where the retail is dominated by a handful of large chains, reform like this has a profound effect on the market.
However, in Estonia no such legislation is being put forward by the Reform-IRL coalition, so producers are bringing media attention to the situation, specifically on fines imposed by the supermarkets on producers for exiguous delivery errors.
In statements to the Äripäev business newspaper, a number of producers complained that anyone supplying to the large Rimi supermarket chain is forced to pay €450 fine if there is any written error on sales documents or they have not reported about the any net weigh changes 30 days in advance, even if the delivery is delayed. As Estonian producers do not have much chances to sell their goods elsewhere, they have little choice but to play by the chains’ rules.
Anti Orav, CEO of Põltsamaa Felix food products company said that if producers fail to meet 98 to 100 percent of Estonian chains’ supply assurance requirements on orders, they face fines.
“This is plausible in situations where the orders were sent in earlier, but at this moment they require this kind of supply assurance even with only 24-hour notice,” Orav told Äripäev.
Orav added that much of his company’s sales become worthless after fines are imposed for late delivery or slight differences in net weight.
Estonian retail chains denied that they are abusing their position in the market. Evelin Mägioja, marketing director at Rimi Eesti told Äripäev that his company is merely ensuring that consumers get the goods they want, and last year’s 61 million krooni (€3.8 million) loss is proof that Rimi is not charging producers anything exorbitant. [/private_subscription 4 months] [private_subscription 1 year]charge “entrance” fees to join the market, or pay arrangement fees or demand cheaper prices in case the product doesn’t sell. In small countries like the Baltic states where the retail is dominated by a handful of large chains, reform like this has a profound effect on the market.
However, in Estonia no such legislation is being put forward by the Reform-IRL coalition, so producers are bringing media attention to the situation, specifically on fines imposed by the supermarkets on producers for exiguous delivery errors.
In statements to the Äripäev business newspaper, a number of producers complained that anyone supplying to the large Rimi supermarket chain is forced to pay €450 fine if there is any written error on sales documents or they have not reported about the any net weigh changes 30 days in advance, even if the delivery is delayed. As Estonian producers do not have much chances to sell their goods elsewhere, they have little choice but to play by the chains’ rules.
Anti Orav, CEO of Põltsamaa Felix food products company said that if producers fail to meet 98 to 100 percent of Estonian chains’ supply assurance requirements on orders, they face fines.
“This is plausible in situations where the orders were sent in earlier, but at this moment they require this kind of supply assurance even with only 24-hour notice,” Orav told Äripäev.
Orav added that much of his company’s sales become worthless after fines are imposed for late delivery or slight differences in net weight.
Estonian retail chains denied that they are abusing their position in the market. Evelin Mägioja, marketing director at Rimi Eesti told Äripäev that his company is merely ensuring that consumers get the goods they want, and last year’s 61 million krooni (€3.8 million) loss is proof that Rimi is not charging producers anything exorbitant. [/private_subscription 1 year]
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However, in Estonia no such legislation is being put forward by the Reform-IRL coalition, so producers are bringing media attention to the situation, specifically on fines imposed by the supermarkets on producers for exiguous delivery errors.
In statements to the Äripäev business newspaper, a number of producers complained that anyone supplying to the large Rimi supermarket chain is forced to pay €450 fine if there is any written error on sales documents or they have not reported about the any net weigh changes 30 days in advance, even if the delivery is delayed. As Estonian producers do not have much chances to sell their goods elsewhere, they have little choice but to play by the chains’ rules.
Anti Orav, CEO of Põltsamaa Felix food products company said that if producers fail to meet 98 to 100 percent of Estonian chains’ supply assurance requirements on orders, they face fines.
“This is plausible in situations where the orders were sent in earlier, but at this moment they require this kind of supply assurance even with only 24-hour notice,” Orav told Äripäev.
Orav added that much of his company’s sales become worthless after fines are imposed for late delivery or slight differences in net weight.
Estonian retail chains denied that they are abusing their position in the market. Evelin Mägioja, marketing director at Rimi Eesti told Äripäev that his company is merely ensuring that consumers get the goods they want, and last year’s 61 million krooni (€3.8 million) loss is proof that Rimi is not charging producers anything exorbitant.
