Kesko calls for equal competition conditions for retailer chains

KESKO CORPORATION PRESS RELEASE 16.11.2007 AT 12.00 According to Professor Paul Dobson, Professor of Competition Economics from Loughborough University Business School, UK, who spoke today at Kesko's competition law seminar, current competition legislation places retailer business operations in a weaker position compared with single-owned chains. In terms of equal competition, the rules should be the same regardless of the structure or form of ownership of the activity. In Kesko's competition law seminar, Professor Paul Dobson presented his research of competition problems and restrictions facing retailer groupings as a result of the current competition legislation and its interpretation. For his research Dobson collected information about the elements of retailer chains' competitiveness from 33 member organisations of UGAL (The Union of Groups of Independent Retailers of Europe) from different parts of Europe. The conclusion of the research was that competition legislation and its interpretation impose unfair restrictions on retailer chains. Instead, competition legislation does not restrict the operations of single-owned chains in the same way. According to Professor Dobson, current competition legislation and its interpretation need amending in order that the competition conditions of retailer business model can be maintained. Retailer chains and single-owned chains must have equal competition conditions in the market. In the worst case, the current situation may cause the retailer business model to disappear which would leave the market to single-owned store chains. Kesko in engaged in retailer business operations in the Finnish food, building and home improvement, agricultural, and home and speciality goods sectors. Retailer-entrepreneurs also operate in the building and home improvement trade in Norway and Sweden. The K-Group retailers run a total of approximately 1,800 stores. In the K-Group, a retailer is an independent entrepreneur who has a chain agreement with Kesko. "In the retailer chain model, the retailer has always more freedom of action and more opportunities to adapt to local demand. Retailer-enterprise coupled with efficient chain operations ensure good customer and market knowledge, as well as good customer service," says Matti Halmesmäki, Kesko's President and CEO. Further information: Anne Leppälä-Nilsson, General Counsel, tel. +358 1053 22347, Minna Hammarberg, Legal Counsel, tel. +358 1053 22569, Professor Paul Dobson (Loughborough University Business School, UK) is an accredited expert in competition in commerce. He has published several economics books about retailing and produced research reports commissioned by competition authorities, including the EU Commission. The Brussels-based UGAL was established in 1963. Kesko has been a member since the 1970s. UGAL represents over 325,000 independent European retailers with aggregate net sales of over 473 billion euros. UGAL's member organisations operate a total of over 454,000 sales outlets, which employ over 3,586,000 people. UGAL member organisations include, for example, ICA (Sweden), INTERSPORT INTERNATIONAL, EDEKA (Germany), EXPERT INTERNATIONAL, MUSGRAVE (Ireland), SPAR INTERNATIONAL, SYSTÈME U (France), ESSELUNGA, CONAD (Italy), MERCADONA (Spain).