Hungary competition watchdog opens follow-up investigation of Spar

In the course of the investigation, which ended in December 2020, the GVH found that Spar had engaged in illegal purchasing practices and abused its significant market power. The GVH found that Spar's bonus scheme unjustifiably and unilaterally imposed fees on suppliers to get their products on the shelves of the store network.

In addition to establishing the fact of the infringement, the GVH resolved to order the company to fulfil certain obligations instead of imposing a fine. The watchdog considered the social benefits of such a commitment programme to be more significant than those of the fine it could have imposed based on its calculations.

Spar undertook to launch a compensation programme with a HUF 1.7 billion budget and create 23 jobs, thus directly serving public interests.

Spar offered a commitment toward the GVH to establish six regional supplier centres (Győr, Hódmezővásárhely, Nyíregyháza, Pécs, Székesfehérvár, Zalaegerszeg) in order to improve the sales opportunities of local small producers. It also pledged that 90% of the opportunities created by this regional system will be offered to micro, small and medium suppliers and the system will simultaneously increase the number of goods procured from the existing small producer partners of the supermarket chain.

In addition, Spar agreed to support the activities of suppliers by offering training opportunities on the topics of quality assurance, logistics, warehousing, and marketing.

"The commitment required from the supermarket network also included a way to verify compliance with these obligations, which allows the GVH to review the relevant expenses down to the last penny. The company is going to certify its spending on furthering its commitment via reports attested by an independent auditor and submitted to the GVH annually," the watchdog said in a press release upon the conclusion of its investigation.

In all cases, the implementation of the commitments is subject to consistent and rigorous scrutiny by the national competition authority. The GVH has on Monday reminded undertakings that the obligations imposed by its decisions must be fulfilled accurately and in full.

In the event of incomplete compliance or failure to prove compliance, the GVH may impose a significant fine on the company concerned. Note that the Hungarian competition authority imposed a record fine of nearly HUF 400 million on Booking in July 2024.

The timing of the competition watchdog's move may not be a coincidence.

Spar Hungary has just won a case against the Hungarian state at the European Court of Justice. The ECJ found that Hungarian legislation implemented in February 2022 requiring traders to offer for sale certain agricultural products at a fixed price and in predetermined quantities is contrary to EU law.

In response to the judgement, the Ministry of National Economy issued a statement, sharply criticising the ruling, saying it "sided with multinationals" that keep driving prices higher, and stated that "the government will always stand by the lowering of prices, and thus by Hungarian families."

The ministry insists that "the attacks made by Spar in various lawsuits are still not based on the measures concerned, but on the real reason for the retailer's dire economic situation".

We are confident that the Hungarian courts will conclude our hundreds of pending cases in line with the interpretation of the European Court of Justice,

Spar said in a statement after the ECJ judgement.

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