The Serbian Commission for the Protection of Competition has initiated an investigation into four major retail chains—Delhaize Serbia, Mercator-S, Univerexport, and DIS—over suspected anti-competitive practices. This action follows findings that these companies may have entered into a restrictive agreement, potentially harming market competition.
Key Takeaways
- The investigation targets four major retailers in Serbia.
- Allegations include entering into a restrictive agreement.
- The retail market in Serbia has seen significant price increases.
- The Commission is gathering evidence to determine the facts.
Background of the Investigation
The Commission for the Protection of Competition launched this investigation on its own initiative, citing concerns over potential violations of competition laws. The investigation aims to assess whether the four companies have engaged in practices that restrict competition, which could lead to higher prices for consumers.
According to the Commission’s findings, the retail market in Serbia experienced a value growth of 7.2% from April 2023 to March 2024, despite a slight decline in volume of 1.9%. This discrepancy raises questions about pricing strategies employed by these retailers, especially given that the annual inflation rate during this period was only 5%.
Financial Trends in Retail
The Commission’s analysis revealed several key financial trends among the retailers involved:
- Gross Margin Growth: The gross margin for these companies increased from 19% in 2016 to 38% in 2023.
- Profitability: The total business profit for these retailers rose from 3.7 billion dinars in 2016 to 18.6 billion dinars in 2023.
- Market Share: Together, these four companies control over 50% of the retail market in Serbia.
These trends suggest that the retailers have been able to significantly increase their profitability, potentially at the expense of fair competition.
Price Analysis
The Commission conducted a detailed analysis of prices for 35 selected products across the four retailers. The findings indicated that many of these products had identical retail prices, raising concerns about price-fixing:
- Price Comparison: During the analysis period, the prices of eight specific products were found to be the same across all four retailers.
- Promotional Offers: Notably, DIS had the highest number of products on promotion, while Cash&Carry PLUS had none.
Conclusion and Next Steps
The Commission concluded that the observed pricing behaviors could be indicative of a lack of competitive pressure among the retailers. They have called for any individuals or entities with relevant information to come forward to assist in the investigation.
This case highlights the ongoing scrutiny of market practices in Serbia, particularly in sectors where consumer prices are significantly affected. The outcome of this investigation could have far-reaching implications for the retail landscape in the country, potentially leading to stricter regulations and enforcement of competition laws.
