The Competition Authority initiated misdemeanour proceedings against Maxima on 19 September 2023 on the grounds of subsections 1 and 4 of § 4 and subsection 2 of § 5 of the Act on Combating Unfair Trading Practices in the Agricultural and Food Supply Chain in connection with the possible non-compliance of contracts concluded between Maxima and sellers with the regulation of said Act. According to the complaint, the violations were in the wording of the contract, where invoices are due for payment after 30 days, and the buyer is given the right to return products that exceed the expiration date to the seller.
Under the Act on Combating Unfair Trading Practices in the Agricultural and Food Supply Chain the payment period must not exceed 30 days and it is also considered an unfair trading practice under said Act if the buyer requires the supplier to pay for the deterioration or/and loss of agricultural and food products, where such deterioration or loss is not caused by the negligence or fault of the supplier, the deterioration or loss has occurred on the buyer’s premises, or the ownership has been transferred to the buyer. Speaking of food in particular, the passing of the expiration date is equivalent to the deterioration of the product.
Although the contracts also included the wording ‘to the extent that it does not violate the requirements of legislation’ with regard to the return of products that have exceeded the expiration date, and which essentially precluded Maxima from being held liable for mere non-compliance of a contractual term, the grounds and motivation for conducting the proceedings were, among other things, the explanations provided by Maxima as part of the supervision proceedings, as well as hints received from market participants in the food industry and dissatisfaction with Maxima’s activities more broadly.
The procedural acts carried out included the questioning of witnesses, extensive tele[1]phone communication with Maxima’s suppliers, and the sending of written inquiries to 26 Maxima contractual partners. The fact of the return of the products that exceeded the expiration date was not confirmed in the course of the proceedings, which is why the Authority terminated the proceedings due to the Act lacking the necessary element of a misdemeanour and with regard to the payment period due to expediency, insofar as there was no confirmation that Maxima had actually been late with payments. The proceedings were terminated on 21 March 2024.