The Agency for the Protection of Competition (AZK) has not yet completed the analysis of the operations of retail chains, that is, whether they are violating the Law on the Protection of Competition and agreeing on the prices of foodstuffs.
AZK told "Vijesti" that they collected the necessary material in the previous period, and that "they will inform the public in a timely manner" when they finish the investigation.
The creation of this analysis was announced by AZK at the end of August last year after the then Minister of Finance Aleksandar Damjanović accused retail chains of being the main cause of food price increases.
"The main cause is the oligopoly ruling the market where four retail chains cover 85 percent of consumption. A tacit agreement, extremely high margins, extremely high margins and the habit that most of it goes to personal profit or the owner's profit", said Damjanović.
AZK explained that in accordance with the Law on the Protection of Competition, they monitor and analyze the conditions of competition in individual markets with the aim of determining the functioning of the market in which a certain activity is performed.
"In this regard, the Agency, as a responsible institution in the system, at the end of 2023, began analyzing the conditions of competition on the market in question (trade chains) and is monitoring this market with particular attention, in order to see, among other things, whether there has been possible violation of the Law on the Protection of Competition by participants in this market. The Agency notes that within the scope of competence from Article 19 of the Law on Protection of Competition, it does not have the competence to determine the price policy of market participants, that is, to influence the formation and height of prices on a certain market", the Agency stated.
When it comes to the results of research on this market, the Agency in the previous period, as they said, collected a large amount of data, information and documentation necessary for a proper and complete determination of the factual situation in order to draw conclusions as to whether there was a possible violation of regulations under the Agency's jurisdiction.
"Both in this market and in all other markets, if the Agency comes across evidence that would indicate a violation of the Law on the Protection of Competition by any business entity, they will be sanctioned in accordance with the legal powers of AZK", the Agency stated. .
The largest retail chains have seen a significant increase in total revenue and profit in recent years, and data from financial reports show that their net profit grew at significantly higher rates compared to revenue growth.
The six largest retail chains (Voli, HD Laković, Idea CG, Domača trgovina, Franca markets and Mega promet), as well as one of the largest importers of food and other necessities (Stadion), had a total revenue of 1,08 billion euros last year, which is an increase of 16 percent compared to 930 million revenues from 2022. Last year, those seven companies had a net profit of 35,5 million euros, that is, it increased by 62 percent compared to 21,9 million from the previous year.
Compared to the pre-pandemic year 2019, the turnover of the same companies last year was 50 percent higher, and the net profit was increased by 125 percent. In the same period from the beginning of 2019 to the end of 2023, aggregate inflation, according to Monstat, was 28 percent.
While the Montenegrin public, still without scientific research, continues to debate the topic of what is the greater cause of inflation - price increases at suppliers, growth in transport costs or higher margins at domestic retailers, these reports indisputably establish that retail chains have benefited, i.e. higher earnings in the period of inflation.
In February, the Ministry of Economic Development (MER) prepared changes to the decision on limiting margins, but the economy announced that it was not consulted. This was followed by meetings with MER, which led to the correction of the initial proposal, so in the end, in mid-March, trade margins for 43 products were limited in the range of five to 15 percent.
This action lasts until the end of May, but the Minister of Economic Development Nick Djelosaj said that they will do an analysis and consider the possibility of continuing the price limit after May.
The previous government, that is, the Ministry of Finance, had prepared a draft law on joint contribution, which defined that all companies pay an additional tax to the state (extra profit tax) whose revenues exceeded five million euros, but the plans for the adoption and implementation of this law were collapsed the moment of dissolution of the Assembly, as well as the announcement of extraordinary parliamentary elections last year.
The Ministry of Finance during the Damjanović mandate decided to propose that law so that companies that gained additional profit during the economic crisis, thanks to the Government's measures in the form of numerous incentives, would now show solidarity and that the burden of the crisis would be evenly distributed and enable the Government to create new aid packages to citizens. Retail chains were among the companies that had to pay this tax on extra profits.
When it comes to the results of research on this market, the Agency in the previous period collected a large amount of data, information and documentation necessary for a proper and complete determination of the factual situation in order to draw conclusions as to whether there was a possible violation of the regulations, said the AZK
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