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Administrative sanctions on major retail stores in Turkey… What are the reasons?

Istanbul- The file of recent government decisions in Turkey related to imposing administrative penalties on a number of major retail stores in the country for raising prices on consumers and manipulating the official pricing of a number of products is still receiving interaction in the Turkish society in its various sectors.

While the citizens expressed their satisfaction with the administrative fines decisions issued late last month, the owners of the shops covered by the decisions confirmed their rejection of them, and expressed their intention to go to the judiciary to cancel the penalties issued against their stores. Some shop owners even accused the government of holding them responsible for the economic situation and dealing with Store them as a scapegoat.

A report by the Turkish newspaper “Sabah” stated that the Turkish Supervisory Board, based on the results of the investigation, imposed an administrative fine of 2.7 billion Turkish liras on a number of famous food retailers, the most important of which are the well-known “BIM” and “A-101” chains. As “A Use Bear”, “Migros”, “Shock”, “Carrefour” and “Savola”.

Summary of investigations

The report – prepared by the writer Hazal Atesh – indicated that the investigations were conducted during the period of the Covid-19 pandemic with the aim of examining the pricing behavior of the famous chains of stores in Turkey specializing in the retail trade of food and cleaning products, noting that the investigation also included the suppliers that those stores deal with.

According to “Sabah”, investigations proved that these giant stores were setting high prices for products, and then putting pressure on other companies to follow the same path, noting that the “Bim” chain – which is one of the most famous retail chains in Turkey – was at the forefront. Companies that have practiced this behavior.

According to the report, the negotiations of the Turkish Supervisory Board on the pricing behavior file on October 28 resulted in a decision to impose an administrative fine of 958 million and 129 thousand liras on the “Beam” store, 142 million and 469 thousand liras on “Carrefour”, and 517 million and 672. One thousand pounds on “Migros”, 22 million and 210 thousand pounds on the “Savola” store, 384 million and 369 thousand pounds on the “Shock” store, and 646 million and 582 thousand pounds on the “A-101” store.

This comes at a time when Turkey is witnessing an escalating political debate about the economic conditions that the country is going through, between the opposition, which says that the state of price hikes and the continuous decline in the exchange rate of the lira against foreign currencies is burdening citizens, and among other sectors that see the goal of provoking this The allegation is to incite against the government and incite the street against it.

Carrefour is one of the stores covered by administrative sanctions in Istanbul (Al-Jazeera)

Fear of tripping

However, experts in trade and investment in Turkey believe that the decision issued against retail companies, although it was welcomed by citizens, did not have any direct reflection on dealing with these companies, whether at the governmental legal level or at the level of shopping traffic and the frequency of daily customers to these stores .

A specialist in trade and investment issues in Turkey, Khaled Diyarbakirli, said that the relative stability of the share prices of these stores in the Turkish stock exchange since the decision was issued indicates the limited direct effects of the decision on them, although some of these stores were subjected to very high fines, such as “Bim” stores, which reached the value of the financial fine. Signed against it for one billion Turkish liras.

Diarbekarli explained to Al Jazeera Net that the biggest danger that companies currently fear is the fear of suppliers’ reluctance to provide them with financial facilities for payment, fearing that they will fall into financial problems if the fines are paid; This weakens the competitive strength it has built through its supply and disposal chains.

And regarding the companies that have been subjected to administrative penalties pledge to go to the judiciary to remedy what they saw as an injustice committed against them, Diarbekirli said that the litigation procedures will take some time, and if a decision is issued against them and they are obliged to pay the fines, they may face other problems that may arise from the passage of litigation time.

One of the branches of the Migros chain that was covered by administrative penalties due to the price hike in IstanbulOne of the branches of the Migros chain that was covered by administrative penalties due to price hikes in Istanbul (Al-Jazeera)

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The stores convicted of exorbitant price increases described the decisions of the Turkish Supervisory Board as coming within the scope of the investigation of “unfair competition”, as the “BIM” chain said that it dealt transparently with the data that did not show any violation of competition by it.

A statement issued by the chain said that “BIM” has contributed to reducing inflation in Turkey in the past 25 years, despite its small profit margin – according to its expression – indicating that showing it as responsible for the high prices is an unfair decision and does not serve the development of the investment environment and the free market in the country.

The “Shock” supermarket chain described the accusations against it as “unfair”, and said in a statement that it was placing at the forefront of its concerns providing citizens with high-quality merchandise at the appropriate cost, while Migros expressed its rejection of the administrative fine decision. Undertook to pursue the file judicially.

The report of the newspaper “Sabah” indicated that the financial penalties imposed on retail chains represented 1.7% of the sales volume of the mentioned companies for the year 2020, explaining that these companies have 60 days to appeal the ruling to the administrative courts in Ankara.

The report indicated that the Supervisory Board took this decision based on the price list obtained through direct or indirect contacts with the suppliers that these stores deal with, explaining that these companies have shared sensitive information related to competition such as future prices, price change dates and reduction campaigns in what between them directly or through partner suppliers.

The report also stated that these companies pressured other companies in the same field to ensure that prices were raised against consumers, although prices were not changed by suppliers.

The supervisory board said in its report that these chain stores resorted to consulting among themselves and adopting punitive strategies for stores that do not follow their approach, and making agreements or taking joint measures aimed at controlling the retail prices of many products offered for sale; This is in clear violation of Article 4 of Law No. 4054.

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Reference-www.aljazeera.net

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