Recent reports from the Competition Protection Commission (CPC) of Serbia indicate that retail price increases in certain markets may not solely be due to inflation. Between April 2023 and March 2024, retail prices rose at a rate “almost double” that of inflation, prompting the CPC to initiate proceedings against four major supermarket chains—Delhaize, DIS, Mercator and Univerexport—on October 10. The CPC suspects these retailers may have colluded to fix prices.
The CPC is currently gathering evidence and conducting analyses to support its case. The duration of such investigations is not defined by law and they can last “from several months to several years,” according to the CPC.
Dejan Gavrilović, a lawyer for the consumer association Efektiva, notes that the CPC believes the supermarkets negotiated final prices even though they procured products under different conditions. He suggests that this collusion led to price increases that exceeded what could be justified by inflation.
As a result of the CPC’s findings, the Special Department for Combating Corruption at the Higher Public Prosecutor’s Office in Belgrade has launched an investigation to determine if criminal offenses have occurred.
Univerexport confirmed it is cooperating with the CPC, while Delhaize, DIS and Mercator did not respond to inquiries. However, Delez and Mercator have stated they operate in compliance with the law.
According to UNICEF research, the number of impoverished individuals in Serbia has doubled since 2022, with around 800,000 people living on less than 12,000 dinars monthly. Additionally, a third of the population struggles to make ends meet, as per the Republic Institute of Statistics.
The CPC’s proceedings focus on allegations of violations of Article 10 of the Law on Protection of Competition, which prohibits restrictive agreements that harm competition. During its review, the CPC monitored the prices of 35 selected products across the four chains, finding identical prices despite varying procurement conditions.
Gavrilović explains that while inflation has allowed merchants to raise prices, the CPC noted that retail price increases were disproportionately high, suggesting collusion. The average inflation rate in Serbia for 2023 was reported at 12.1 percent.
Despite a decline in the volume of products sold, the value of the retail market increased during this period, indicating higher profit margins for retailers. The average gross margin in Serbia was reported at 14.9%, but the margins for these four chains were significantly higher—44.2% for Delez, 36.8% for Mercator, 36% for Univerexport, and 16.52% for DIS.
If the Higher Public Prosecutor’s Office finds sufficient evidence of criminal wrongdoing, it may initiate criminal proceedings against the supermarket chains. Meanwhile, the CPC is already conducting its own proceedings, with potential fines based on up to 10% of the companies’ revenue from the previous year.
The CPC can either suspend or terminate the proceedings if no violation is found or if an agreement is reached to rectify the issue. However, serious breaches of competition law, like long-term abuses of market dominance, would prevent suspension.
Determining evidence of collusion may be challenging, as such agreements are unlikely to exist in written form. Ultimately, any resolution will depend on subsequent monitoring of prices in the market.
