RIGA - Maxima and Rimi, the two largest retailers in Latvia, have been accused of violating the Competition law and may now face court proceedings.
"The Latvian Competition Council has opened a case against one of Latvia's largest retail chains for allegedly imposing unfair terms on producers," Raimonds Jonitis, the acting chairman of the competition watchdog, said at a Cabinet meeting.
Jonitis, though not specifying which retailer had first overstepped the boundaries, said that the retailer in question had made producers use a centralized logistics network for the distribution and return of goods.
Jonitis said that within a month the Competition Council will also open a case against the other leading retail chain, also over the alleged enforcing of unfair terms on producers.
Inita Kabanova, spokesperson for the Competition Council, confirmed that the Council has initiated proceedings against Maxima and that proceedings will be initiated against Rimi as well
"At the moment this case is being investigated, that is why the Competition Council will not release any more information," Kabanova announced
"All illegal activities will be punished," said Jonitis.
He said the Competition Council was watching closely the developments on the Latvian retail market.
Zane Enina, a spokeswoman for Rimi Latvia retail chain, said that the company made all efforts to abide by the Competition Law and that she was not ware of any reasons that might have prompted the competition watchdog to move against Rimi.
Enina continued that the company had consulted with the Competition Council experts when amending the existing agreements to bring them in line with the amendments to the Competition Law.
Ivars Andins, a spokesman for Maxima Latvija food retailer, told reporters that he would not comment on the case as so far the company had not received any information from the Competition Council about any alleged violations of the Competition Law. The store has since been informed.
If convicted, the retailers may have to pay up to 10 percent of their net turnover from 2008, which will then be funneled into the state budget.
Rimi and Maxima, each of which controls over 20 percent of the Latvian market, are the largest food retail chains in the country.
The Competition Council is under the supervision of the Ministry of Economics.
The Competition Council would not give any information as to results of the investigation.