APDC IDENTIFIES THE PROBLEMS OF THE RELATIONSHIP BETWEEN RETAIL CHAINS AND DOMESTIC SUPPLIERS OF PRODUCTS

As part of the analysis conducted by the Agency for the Protection and Development of Competition, key problems in cooperation between large retail chains and grocery retailers, as well as prospects for the development of civilized trade, have been identified.

The study of the dynamics for 2021-2022 showed a high concentration of the market, which entails a decrease in the number of large retail outlets in the Republic of Kazakhstan against the background of a decrease in the total retail area by about 10%. In particular, in 2022 there were 269 subjects of internal trade (with a trading area of 1,112 million square meters), in 2021 there were 281 subjects (with an area of 1,128 million square meters). The Agency covered more than 125 large subjects of internal trade operating in this market.

The share of food products in the total volume of retail trade is 35.6% of non-food products - 64.4%. The volume of sales of food products decreased by 5.4% compared to January-December 2021, and non-food products increased by 6.6%.

The largest share of the volume of retail and trade of food products by the end of 2022 is occupied by regions: Karaganda region - 42.8%. Ulytau - 41.9%, North Kazakhstan region - 41.6%, Aktobe region - 39.7%, Zhambyl region – 38.5%. Kyzylorda region - 37.6%, Almaty - 34.6%.

The key problems in the relationship between retail chains and suppliers are the imposition of unequal conditions of cooperation that limit the capabilities of manufacturers.

The main source of income for retailers is the trade margin, as well as additional services, including the promotion of goods and the sale of advertising space, Also occurs when the maximum legal size of the trade mark-up of 15% on the NWPT by retail chains is exceeded, affecting the final cost of the goods.

The Agency has identified 27 facts of violation of legislation in the field of trade activities.

Within the competence of the antimonopoly authority, 4 notifications were issued against large retail chains on grounds of violation of competition protection legislation.

In addition, the problem of late payment for goods is being raised, forcing suppliers to work in conditions dictated by retail chains.

In conclusion, the analysis highlights the need to improve the legislation of the Republic of Kazakhstan to eliminate the imbalance between market participants and promote a healthy competitive environment.

The Agency actively cooperates with the authorized bodies (MIT) to improve the current legislation on the regulation of trade activities. Currently, the authorized body is making appropriate changes.

More information about the analysis can be found here: https://www.gov.kz/memleket/entities/zk/documents/details/610551 ?lang=ru