On November 19 2012 the Competition Authority delivered its decision(1) to fine Frikom AD - a producer of frozen goods - €3 million (4% of Frikom's relevant turnover in 2009) for abuse of its dominant position on the Serbian wholesale ice cream market.
Frikom's wrongdoings included:
- Providing for the resale price maintenance in supply agreements with retailers and customers;
- obliging retailers and customers to purchase exclusively from Frikom and prohibiting retailers and customers from selling competing products (including the exclusive use of space in refrigerators, on shelves and in shops);
- obliging retailers and customers to satisfy 100% of the needs for the relevant products from Frikom only;
- providing for high damages compensation in case of a breach of any contractual clauses by retailers and customers;
- entitling Frikom to terminate the supply agreement unilaterally with an inappropriately short notice period in case of breach of contract by retailers or customers; and
- the application of the different commercial terms and conditions on the same business relations with different retailers and customers.
Frikom must pay the €3 million fine within six months of the date of the Competition Authority's decision. The authority also requested that Frikom publish an announcement on its website stating that it has been fined by the Competition Authority and to amend the problematic agreements providing proof that all critical clauses will be replaced with those compliant with competition law. Frikom has the opportunity to lodge an appeal before the Administrative Court within 30 days of the decision. Given the amount of the fine, it is believed that that Frikom will appeal.
For further information on this topic please contact Srdjana Petronijevic at Moravcevic Vojnovic i Partneri in cooperation with Schoenherr by telephone (+381 11 320 26 00), fax (+381 11 320 26 10) or email ([email protected]).
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.