Ukrainian retailers join forces in procurement


Ukrainian retailers join forces in procurement

05/18/2020

NOVUS, Fayno Market and Delikat will merge for joint purchases

By the decision of the Antimonopoly Committee of Ukraine dated 08.08.2019, Novus Ukraine LLC, Veresen Plus LLC and Delicat Retail LLC granted concentration permission in the form of creating a trade and purchasing union (in the form of Association of Regional Networks LLC) for the purpose of joint procurement food and non-food products, reports All Retail.

The founders of the trade and purchasing union are regional trading companies: Veresen Plus LLC (Faino Market chain of stores in Kirovograd region), Delicat Retail LLC (Delicat network in Cherkasy region) and NOVUS Ukraine LLC ( NOVUS network).

On the basis of an application for a permit for concerted actions from the specified business entities, and with the aim of studying the state of competition and the consequences of the declared actions in the regional wholesale and retail markets of food and non-food products, the Committee considered a case on concerted actions. According to its results, it was established that the shares of LLC Novus Ukraine, LLC Veresen Plus and LLC Delikat Retail in these markets are insignificant; participants in concerted actions have powerful competitors; each participant individually and collectively do not have market power in the involved product markets and, accordingly, are not able to perform actions that may lead to the elimination or restriction of competition.

See also: Growth in imports, declining exports and higher prices for vegetables and fruits – the consequences of market closures for Ukraine

It is expected that the activities of the Association of Regional Networks LLC will contribute to the development of competition and have positive effects for both consumers and suppliers, in particular:

will help provide consumers with quality goods at a lower price;

reduce retail sales prices of goods from 10.10 to 14.27%, depending on the network;

increase turnover, access to new markets, reduce costs, increase business value, increase revenue for suppliers;

will facilitate the development and market entry of regional and small suppliers;

will provide suppliers with additional sales channels.

During the investigation of the case, it was established that the conclusion of such agreements on joint procurement and / or the creation of associations (partnerships, associations) of retailers is a permitted European practice, acceptable for competition.

The Committee granted permission for coordinated actions of LLC NOVUS Ukraine, LLC Veresen Plus and LLC Delikat Retail, which are concluded in the fulfillment of the terms of the agreement on joint activities, which regulates the functioning of the trade and procurement union for a period of 3 years.

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