“Amendment to the Regulation on Margins causes pressure from retailers to fail” – Has the state managed to close the loopholes in the regulations?

At the time when measures against high prices of food and other products were announced, through margin restrictions, economists immediately assessed that they would last “until retailers find a way to circumvent them.”

It has turned out that retailers did try to outwit the state and circumvent the announced measures even before they came into effect, i.e. before September 1.

Serbian President Aleksandar Vucic pointed this out, stating on Thursday evening that some retailers had contacted suppliers and manufacturers, asking them to increase prices by 14 to 20% through rebates, so that the price would remain unchanged, while they remained compliant with the regulations.

Vucic also said that retailers had threatened suppliers with removing goods from the shelves if they did not agree to these conditions.

He then announced that the Regulation would be changed due to pressure from retailers on suppliers, which was done the very next day.

The new Regulation, adopted on Friday, includes limiting the logistics rebate and compensation for shortages and write-offs to three and one percent, respectively.

What exactly did the retailers try to do?

The Consumer Association Efektiva pointed on Friday morning that retailers, specifically Delhaize, on Thursday, the day the Regulation was adopted, which stipulated a margin limit of 20%, as well as a limit on “off-rebates” to 10%, had been pressuring suppliers to increase prices.

The Association indicated that the previous Regulation defined the amount of so-called logistics rebates, which may not be higher than the amount valid on the day the Regulation came into force.

– In order to compensate for the reduction in margins to 20%, Delhaize managers (used to an average margin of 45%) called their suppliers yesterday and asked them to sign annexes to the contracts, in which they would increase the percentage of the logistics rebate, in some cases several times – the Association indicated.

They added that they were asking suppliers to “backdate” these annexes, i.e. sign them with a date that preceded the Regulation, so that it looked as if the percentage of the logistics rebate had been increased before the Regulation and so that the higher percentage would now be applied.

– In this way, they reduce the effect of the off-rebate limitation, compensating for it by increasing the logistics rebate. For this reason, the reduction in the off-rebate, instead of being transferred to a price reduction that would ultimately benefit consumers, leads to the money remaining in Delhaize’s pocket – the Association stated.

The Danas portal sent questions to Delhaize to confirm or deny these claims, but did not receive a response by the time this article was published.

Udruženje bankarskih klijenata Efektiva

Delhaize Serbia d.o.o. Beograd

Consumer Association Efektiva

Delhaize

Aleksandar Vučić

limiting trade margins