Final Report Of Turkey Fast Moving Consumer Goods (“Htm”) Retailing Sector Review

In Turkey, where the traditional retail channel maintains its weight, organized HTM retailing has been developing over the years. The level of concentration of the market in the HTM organized retail sector is increasing rapidly. When the course of market shares over the years is monitored, it is seen that while the market share of the top four companies has increased, local and regional markets have lost share. Within the scope of the examinations, this concentration in the sector is not realized through slow and unnoticed acquisitions, but through new store openings. As such, it follows that there is no need to lower the merger and acquisition notification thresholds specific to the retail sector. The increasing concentration in the HTM retailing sector has also begun to shape the markets where products are manufactured, packaged and supplied. As the market shares and market power of the top four retail enterprises with the highest market share increase, the purchasing power of these enterprises in the supply market also increases. This receptive power; it has a greater impact on small-scale suppliers and local suppliers, while remaining at a limited level for suppliers who have market power or operate worldwide.

With the increase in buyer power, allegations that retailers engage in unfair commercial practices on suppliers are raised. Examples of these practices are charging from suppliers under various names, extending payment terms and unilaterally making changes to the contract. Abuse of buyer power can complicate the activities of small and medium-sized suppliers, weakening the competitiveness of these undertakings. Considering that small and medium-sized enterprises are the cornerstones of the country’s economy, it is understood that it is essential to prevent these practices that may lead to a decrease in the income of these actors and to weaken their motivations for investment, opening up to new markets and developing new products.

Ensuring that undertakings do not abuse their buyer power also reflects positively on competition among retailers. Falling prices will play an important role in gaining the expected benefits from competition in the HTM retail sector and contribute positively to the competitive structure of the market.
In order to prevent the abuse of buyer’s power, the Unfair Trade Practices Directive was put into force by the European Commission in 2019. The relevant regulation aims to establish a healthy market environment for the whole agri-food supply chain by protecting farmers, farmers’ organizations, suppliers of agricultural products and suppliers selling processed agricultural products who are in a relatively powerless position in the face of high buyer power. Since similar regulations should be implemented in our country, the Directive has been a guide in this respect.

In this context, in the Draft Law Proposal on the Amendment of the Law on the Regulation of Retail Trade (Draft Law), regarding unfair commercial practices;
– Payment terms exceeding 30 days in terms of perishable agricultural products and food products,
– Payment terms exceeding 60 days in terms of other agricultural products and food products,
– Cancellation notifications made in a short time in perishable foods,
– Unilateral contract changes of the buyer,
– Payment requests that are not related to the transaction,
– Transfer of the risk of loss and defective goods to the supplier,
– Failure to give written approval to the supply contract by the buyer despite the supplier’s request,
– The misuse of trade secrets by the buyer,
– Commercial retaliations by the buyer,
– It is considered that the transfer of the cost of examination of consumer complaints to the supplier should be prohibited.
On the other hand, within the scope of the same regulation;
– Return of unsold products,
– Payment of listing, shelf and stock costs by the supplier,
– The supplier pays for the promotion,
– Payment by the supplier for marketing,
– Payment by the supplier for advertising,
– It is considered that there is a need to prohibit the buyer from charging personnel fees to the supplier for placing the supplier’s products in the areas used to sell them, or to regulate that the retailers may charge fees in these matters only if there is a clear regulation on the subject in the contracts made between the parties.
In addition, in order for these regulations to be implemented effectively and continuously,
– Establishment of an independent unit for the follow-up and supervision of regulations,
– The unit in question; be structured specific to the task, have the authority to make complaints or ex officio examinations,
– The relevant unit has the authority to conduct unannounced investigations, taking into account the possibility of confidential execution of unfair commercial practices,
-Volume; it must be endowed with powers such as requesting information, imposing fines, directly ending the violation.
Within the scope of administrative fines;
– The fines to be established to prevent unfair commercial practices are of a deterrent nature,
– To be able to process for a period of time until the violation is terminated,
– In order to ensure deterrence, it is considered that the administrative fine should be established on the basis of the turnover of the enterprise and that there should be an opportunity to increase the penalty in case of repetition.
Along with these;
– In order to prevent the retailer from transferring responsibility through another firm for the purchase in order to avoid these arrangements, the principle of economic integrity, which may refer to the subsidiary, the associated company, the subsidiary, is included in the regulation, and
– For the resolution of possible disputes; It is thought that it would be beneficial to implement the regulations to ensure that the possibilities of applying to alternative dispute resolution methods such as conciliation, mediation and arbitration are not determined as a condition of litigation and that the application of alternative dispute resolution methods does not prejudice the right to complain before the relevant unit.

These recommendations include that in relation to the discount, it should be ensured that the product is available in the store for the period during which it is announced to be discounted (through traditional media, social media or other announcements and advertisements) and that the product is sold at the announced discounted price during this period. Consumers have often raised similar issues in their complaints, stating that the products announced to be discounted cannot be found in retailers. It is considered that this regulation will provide benefits for the protection of both the consumer and competition.

In competition law legislation, in addition to the provider market share, the buyer market share threshold criterion is not used in the examination of whether a vertical agreement benefits from the group exemption, except for agreements that involve the obligation to provide a single buyer. Due to the increase in the buyer power of retailers, it is thought that the buyer market share threshold can be added to the legislation. On the other hand, as in the European Union practice, it is considered that it is possible to prevent the abuse of the recipient power in the real sense by introducing a regulation similar to the Directive of the European Commission into the legislation of our country.




Maslak Mah. Tas Yoncası Sok.
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Sariyer Istanbul – Turkey

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