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
"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.
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).