On 6 March 2016, Act No. 395/2009 Coll. on significant market power in the sale of agricultural and food products and its abuse, implemented by Act No. 50/2016 Coll., entered into force. The amendment’s stated objective is to assure greater protection for foodstuffs suppliers, remove ambiguous legislative provisions and make it easier to initiate and conduct proceedings against large retail chains and im- pose penalties. The amendment modifies the definition of some basic concepts such as the terms supplier, customer and purchas- ing alliance and newly defines the term significant market power, a position in which the customer can, without justifi- cation, assert an advantage over suppliers in connection with the purchase of food or receipt or provision of services re- lated to the purchase or sale of food. Under the amendment, a presumption of significant market power also exists in cer- tain cases, e.g. of a customer whose turnover from the sale of foodstuffs and associated services in the Czech Republic exceeded CZK 5 billion for the last fiscal period. The amend- ment stipulates the particulars of an agreement between a customer with significant market power and a supplier and imposes a duty to execute such an agreement in writing.

A fine of up to CZK 10,000,000 or 10 of the customer’s net turnover for the last fiscal period may be imposed for a gross violation of the law, e.g. abuse of market power or breach of the duty to execute a written agreement.

A practical consequence of the amendment (or its temporary provisions) is the obligation to execute an agreement exe- cuted before the law’s effective date compliant which is with § 3a of the Act, as amended, within 3 months of the amendment’s effective date, i.e. by 6th June, 2016.