Chapter 8: Voluntary Chains and the Competition
Simplifying competition regulation creates an increased competition climate
Chapter 8 examines the competition situation in the retail sectors between the voluntary chains on one side, which consist of self-employed independent companies, and capital chains with shops owned by the same company.
In recent years the voluntary chains have maintained a constant high market share and shown good results. Despite this, analysis relating to the existing regulation proves it to be beneficial to revoke the special Danish Block Exemption Regulation for horizontal agreements in the retail industry. Thus the voluntary chains in the future will be assessed according to the general competition rules. This will ease up on the voluntary chains and avoid spending too much time on complicated rules.
When the voluntary chains have greater freedom to make decisions on agreements concerning shop concepts, exposure of goods, number of shops, where to place shops, and marketing, they will have more favourable possibilities to compete with the capital chains. This will enhance the voluntary chains competition capacity vis-à-vis the capital chains, which also will be of advantage to the consumers.
At the same time the voluntary chains will be able to use their purchasing power to enter more advantageous purchasing agreements with their suppliers and provide a more consistent appearance to the consumers. The consumers will consequently have better chances of getting the same – hopefully good experience – no matter which shop they might visit.
Price agreements will continue to be illegal. Moreover, the individual member of a voluntary chain will still have the liberty to make certain dispositions himself in the shop he owns and bear the financial risk.
(Kristian Henriksen)