FOODSTUFFS TRADE: Parliament issues law which fuels conflict between producers and supermarkets

• Whereas those who initiated the law claim that this will lead to lower food prices in supermarket, retailers warn that this will cause the opposite and that the law is harmful

• Valeriu Tabără: "It would be a good idea to follow Poland"s model, where supermarkets are closed one day a week, in order to allow smaller stores to do business"

In theory at least, the new law should help bring lower prices in supermarkets. It is based on the provisions of the Good Practice Code, which was however, inefficient in its initial form, because it did not provide any financial penalties for non-compliant retailers and it had no legal grounds.

Deputy Valeriu Tabără, chairman of the Agriculture Commission, considers that under the current circumstances, the law is good and it will regulate "matters which were unclear in contractual relationships". In turn, Dragoş Frumosu, the president of the National Federation of Unions in the Food Industry (FNSIA), claims that the new law will eliminate "the abusive tactics of supermarkets" and will solve the issue of "excessively inflated prices". "We can"t continue any longer without this law", says Valentin Blănaru, executive director of the Romanian Professional Association of the Dairy Industry (APRIL).

• Makers of the law: "People will see significantly lower prices in supermarkets"

Since many provisions of the Good Practices Code now have a legal form, and the law now clearly regulates commercial relationships and the transparency of costs and revenues, lawmakers claim that this will benefit first and foremost "consumers which will see major cuts in the price of products found on the shelves of supermarkets". Strangely enough, this claim is challenged by the retailers themselves, who claim that the new law will have "catastrophic consequences" and will not benefit the population in any way.

• Retailers: "The law is unconstitutional, and will cause prices to go up!"

"This law in itself shows recklessness and incompetence of the political factors and of the interest groups which lobbied for the passing of this version of the law", the Association of Major Commercial Chains (AMRCM) claims, in a press release sent to our editors.

Retailers warn that the "anti-competitive and obtuse nature of the law", will actually cause "prices to increase, instead of decrease".

Among other things, AMRCM claims that one of the provisions concerning shorter the delays in paying supplier invoices "will be impossible to abide for many retailers, thus leading to delays and financial deadlocks, which can end up in bankruptcies, for retailers as well as for their suppliers". Retailers also claim that passing the law in its current form will eventually lead to loss of jobs and a steep drop in consumption.

• AMRCM urges president Băsescu not to enact the law

Last but not least, retailers claim that the law is unconstitutional and urged president Traian Băsescu not to pass it. "We sincerely hope that the President of Romania will reflect on all the of the aforementioned things, will ponder the effects of passing the new law and understand the danger its enactment poses, as well as the dangerous, populist and arbitrary nature of abusively regulating competition in the market economy, and will make the wise choice of refusing to enact this law", AMRCM officials say.

• Tabără: "Supermarkets should have specific regulation"

Valeriu Tabără said: "The law is good enough for the current circumstances. It regulates the issues which were unclear in matters of contracts, but does not solve the matter definitively, in particular in the case of perishable products".

Valeriu Tabără considers that supermarkets would require specific regulation. "It would be a good idea to follow Poland"s model, where supermarkets are closed one day per week, on Sundays for instance, in order to allow small stores to do business".

This opinion is backed by Dragoş Frumosu, chairman of the National Federation of Unions in the Food Industry, who feels that this would improve competition.