Romanian retailer Profi investigated for abuse against small suppliers

Romania's competition body, Consiliul Concurentei, announced it carried out investigations at the local retail chain Profi related to alleged unfair commercial practices in relation to its suppliers of food products.

The investigations specifically regard late payments and unilateral termination of contracts, the competition body said.

However, the supplier that prompted the case, a small firm selling deserts, has denounced that the practices of Profi (and other retailers) are far more abusive than implied by the competition body's press release.

Profi assured that its decisions were based on commercial reasons, in line with the contracts and legislation. It also assured full cooperation with the Competition Council.

The investigation is based on Law 81/2022 on unfair business-to-business trading practices in the agricultural and food supply chain. It was prompted by a complaint from a supplier, Pravalia D'Art, claiming that Profi failed to observe the contractual payment terms and unilaterally terminated the contract, according to the Competition Council.

In prior comments, the owner of Pravalia D'Art complained about the retailers (including Profi) using their superior bargaining power to impose unfair clauses in the contracts. It claims that the contracts imposed by retailers are designed in such a way that suppliers can no longer invoke the national legislation on competition and unfair trading practices.

Specifically, the supplier's owner, Florin Ionita, claimed that only a couple of months after the renewal of the contract in December 2023, and in the context of rising sales for his products, Profi unilaterally decided to terminate the contract, causing him a significant financial loss, Hotnews.ro reported.

Furthermore, Ionita claimed the retailer's (and retailers', in general) practices are far more abusive: he said Profi hasn't returned the contract signed, has amended the contract unilaterally, and failed to observe the 60-day notification term for the termination of the contract.

Such allegations should, in principle, be part of the investigation initiated by the competition body.

The investigation occurs in the context of chronic tensions between small local producers and large, generally foreign-owned retailers – broadly believed to favor large multinational suppliers. The conflict has often been politicized.

"We have received no official complaints from producers regarding the behavior of the retailers until now. We hope that with this first case, we will encourage Romanian producers to come to us if they believe that the legislation regulating the relationship between traders and suppliers has been violated," said the head of the Competition Council, Bogdan Chirițoiu, while announcing the investigation on Profi.