Monitoring: The Competition Protection Commission has identified an instance of abuse of bargaining power and violation

The Competition Protection Commission has identified an instance of abuse of bargaining power and violation of economic competition, specifically, a business entity failed to make payments to agricultural product suppliers within the required 30-calendar-day period, which violates the principles of fair competition.

As part of the amendments to the Law on Economic Competition, it has been established that retail chains are now legally required to have a website, set equal rules for entry and exit, have a contract with suppliers, and pay the supplier within 30 days for food products and 60 days for non-food products. 

If these deadlines are violated, or if retail networks continue to leave outstanding debts unpaid, please contact the Competition Protection Commission at [email protected], 374 (60) 830840.

According to the legislative amendments mapped out in the scope of the SME public-private dialogue platform, and developed by the IC Armenia experts' team,  it was established that the commercial chains are obliged to pay for the supplied food products within 30 days, and for non-food products within 60 days. 

As you may know, for small and micro businesses, the retail chains are the main way to present their products. In many cases, the rules for entering the retail chains are not clear and equal for all businesses, the chain in many cases applied a discriminatory approach to different businesses. And if the supplier managed to enter the commercial chain anyway, the latter abuses its position and delays the payments to the SMEs for up to several months.

In the scope of the reform, it was established that the commercial chains are obliged to pay for the supplied food products within 30 days, and for non-food products within 60 days. In case of accumulation of the debt of up to 3 million per supplier within 90 days, the Competition Protection Committee may consider it as an abuse of its dominant position by the commercial network and a fine of up to 10% of the network's turnover in the previous year will be imposed. The law stipulates that the commercial network must have a contract with each supplier, a mandatory website, where the terms and parameters of entering the commercial network will be determined.

The Competition Protection Commission is currently conducting monitoring to determine whether these deadlines are being violated or if retail chains continue to fail to repay previously accumulated debts.