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Dimitris Loukas Vice-Chairman HCC European Competition Day, Nicosia, 2.10.2012

The impact of the financial crisis on strategic planning & case prioritization in food and retail markets – the Greek case. Dimitris Loukas Vice-Chairman HCC European Competition Day, Nicosia, 2.10.2012. Focus on food and retail markets.

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Dimitris Loukas Vice-Chairman HCC European Competition Day, Nicosia, 2.10.2012

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  1. The impact of the financial crisis on strategic planning & case prioritization in food and retail markets – the Greek case Dimitris Loukas Vice-Chairman HCC European Competition Day, Nicosia, 2.10.2012

  2. Focus on food and retail markets • Increased public pressure due to severe economic downturn – income reduction & perceived rigidity of food prices • Complex issue with many variables • Priority setting • Food & retail markets: a priority sector by default • Directions for action at EU level (since 2008) – policy initiatives for a better functioning food supply chain in Europe • Monitoring developments in agricultural commodity and food prices • Adjusting CAP and enhancing agricultural supply in the longer term • Improving the competitiveness and functioning of the food supply chain (including competition-related initiatives undertaken by NCAs) • Pursuing competition-related initiatives in the Greek context: the role of the HCC in devising a coherent strategy

  3. Devising a coherent strategy in food and retail markets • Three (3) pillars: 1. Diversifying market monitoring actions 2. Maintaining a consistent level of competition enforcement albeit the crisis, while adapting case allocation & focus 3. Expanding considerably competition advocacy in order to promote much needed structural reforms (addressing, in particular, regulatory distortions affecting the functioning of the food supply chain) • Promoting complementarity of actions, with a view to optimizing likely effect • Seizing the opportunity to streamline institutional arrangements and consolidate internal organization

  4. Diversifying market monitoring actions • Towards a better understanding of price formation and price transmission mechanisms (more-informed policy choices and more targeted competition enforcement and advocacy) • Public consultation (2010 – 2011) • Sale of basic nutritional products and products for daily consumption • Launch of sector inquiries (vertical vs. horizontal approach) • Fruits & vegetables (2011 – ongoing) • Systematic monitoring of price developments • Cooperation with other key stakeholders & research centers • Conclusions – Realignment of strategic planning & policy focus

  5. Competition enforcement (1) • Maintaining a consistent level of competition enforcement in food & retail markets • Statistics • Investigative tools and detection techniques • Typology of likely anti-competitive practices (classic cartels & resale price maintenance, as opposed to practices warranting a more careful balancing exercise – the use of market power screens) • Examples of antitrust cases • Abuse of dominance investigations increased considerably • Renewed focus on trade associations • Merger review • Market definition challenges

  6. Competition enforcement (2) • Recurring themes • Safeguarding conditions of effective competition, by facilitating unimpeded access to (a) upstream input markets and (b) downstream sales outlets, while also attempting to address concerns of unequal bargaining power • Focus on new areas / sophisticated practices • Sustained emphasison exclusivity-type arrangements at the distribution level (selection) • Classic exclusionary practices (exclusivity agreements, target rebates) • Commitments pertaining to shelf/store space • Slotting allowances

  7. Competition advocacy (1) • Interplay between competition enforcement and competition advocacy – the case of food & retail markets • Revision of Greek Competition Act strengthened the HCC’s advisory powers, notably providing for the power to issue formal Opinions on (draft) legislation, with a view to identifying and removing regulatory obstacles to competition • HCC’s enhanced role boosted by specific provisions in the context of the MoU • This prompted the most far-reaching intervention of the HCC in terms of regulatory obstacles to competition, notably in the areas of liberal professions and retail • Allocation of resources – institutional arrangements

  8. Competition advocacy (2) • Intensifying advocacy efforts in food & retail markets (horizontal & vertical dimension, 2011-2012) • Reform of Market Regulation Code • Abolition of price-list notification requirements imposed on companies • Removal of restrictions concerning the selling of baby milk (formulas for infants under the age of 6 months) solely in pharmacies • OECD Competition Toolkit project

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