Systematic late payments to suppliers seemed an unfair trade method
The fruit and vegetable company Grönsakshuset has engaged in an unfair trade practice by systematically making late payments to several of its suppliers, according to the Swedish Competition Authority, which has decided that Grönsakshuset must pay an administrative fine of SEK 3 million.
After receiving indications that Grönsakshuset i Norden AB was using payment terms that violate the Swedish Act on the Prohibition of improper trade methods between companies in the agricultural and food production chain (LOH), the Swedish Competition Authority initiated an investigation. The company, a wholesale trade company in fruits, vegetables, and flowers, has repeatedly used unfair trade practices by paying suppliers later than the law permits, according to the Swedish Competition Authority.
“In this case, we observed a widespread and systematic use of late payments, which has effectively forced suppliers to act as a bank for Grönsakshuset. The prohibition against late payments aims to prevent this, as late payments lead to reduced liquidity for primary producers and food producers. Increased liquidity provides better resilience to unexpected events and significantly rising costs,” says Martin Bäckström, Head of Unfair Trading Practices Unit.
In a decision, the Swedish Competition Authority has established that Grönsakshuset is to pay an administrative fine of SEK 3 million. The amount is based on an assessment of the nature, duration, and scope of the infringement.
According to the Swedish Competition Authority’s investigation, the company has made late payments to suppliers thousands of times, which is not allowed under LOH. This infringement is considered serious, as the late payments occurred systematically and over an extended period.
LOH aims to prevent the use of unfair trade practices in the agricultural and food supply chain. One of the prohibited practices is for a buyer to pay their supplier later than 30 days.
The decision by the Swedish Competition Authority can be appealed to the Administrative Court in Stockholm.
For further information, please contact:
Marie Strömberg Lindvall, Press Officer, +46 76-542 15 92, marie.stromberglindvall@kkv.se
Kristin Kindgren, Senior Case Officer, +46 8-700 16 71, kristin.kindgren@kkv.se
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Last updated: 2024-11-11
Press release3 october 2024