Thursday, July 3, 2008

Retailers sign pact to boost competition in Romania

BUCHAREST, July 2 (Reuters) - Romanian food producers and main supermarkets agreed on Wednesday to make retail pricing more transparent in a bid to lower prices and shield consumers from the global rise in food costs.

Under an agreement put forward by the government, producers will have more flexibility in setting prices, now largely dictated by big retailers, farm ministry officials said.

"The new rules are aimed at boosting competition in the market, eventually leading to lower food prices," said Georgiana Tanase, media adviser at the agriculture ministry.

Like other countries in eastern Europe, Romania is struggling to ease poverty while combating pressures from global price rises and rampant consumer spending, which have pushed inflation as high as 8.6 percent this year.

On Tuesday, the main political parties met to agree policies to cushion those hardest hit by soaring food and energy costs.

The agreement announced on Wednesday, which needs approval from the competition watchdog, sets standards for commercial contracts and bans practices that may distort competition.

For example, retailers will no longer be able to prevent producers from selling their goods at cheaper prices to their competitors. The agreement also scraps a practice obliging producers to contribute to supermarkets' marketing costs.

It was signed by producers in the bread, wine, milk and meat sectors and by major retailers, including Germany's Metro (MEOG.DE: Quote, Profile, Research) and its Real hypermarket chain, Selgros and Kaufland, Cora, of the Delhaize Group (DELB.BR: Quote, Profile, Research), France's Carrefour (CARR.PA: Quote, Profile, Research) and Auchan [AUCH.UL]. (Reporting by Luiza Ilie and Radu Marinas, editing by Will Waterman)

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