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The Code of Good Practice intensifies the dispute between foodstuff producers and retailers
The Code of Good Practice or the foodstuff trade law, signed into law on Wednesday by Romania’s President Traian Basescu will not lead to a drop in foodstuff prices, and local traders actually expect such prices to rise. Moreover, the new law will led to financial blockages, even possible bankruptcies, resulting in job losses and less revenues to the state budget. The Code of Good Practice is to go into effect next month.
Romania’s Association of Large Retail Networks (AMRC) said that the signing of the foodstuff trade law by President Basescu is the final and clear expression of the state’s unjustified intervention in the free market economy, and the only explanation for adopting this piece of legislation is the favourable response of the political factor to particular economic interests.
The Competition Council recently said there was major competition between traders on the Romanian market, and that it was unlikely that the state’s interventionist measures could lead to the results mentioned by traders. Neighbouring countries, such as Hungary, Slovakia, and the Czech Republic, have witnessed the failure of similar laws.
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Local producers say that the law is the best anti-crisis measure, because it protects the local industry, which will expand and create new jobs, and will lead to lower prices on foodstuffs.
According to the Code, traders are not allowed to impose on the supplier the payment of services that are not directly related to the sale, nor are they allowed to sell products at a price equal or lower than the acquisition cost. Moreover, retailers may not request their suppliers to not sell the same products to other traders at a final price lower or equal to that paid by them for the products. A prior two-month notification to the supplier is necessary if the trader decides to delist a product. There are also fixed deadlines for invoice payments: 12 days for fresh products, 20 days for frozen products, and 35 days for other products. (Business Standard)
Autor:
Dragos Serban
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