Regulation of retailer-supplier relatiohships within the food chain

This thesis deals with retailer-supplier relationships within the food chain, and with possibilities of their regulation. The aim is to assess the effect of regulation of retailer-supplier relationship, through "Act on Significant Market Power and Abuse thereof" on particular food chain members, and eventually to propose an alternative solution of their regulation. The thesis states the following hypothesis: The Act on Significant Market Power does not change bargaining power between suppliers and retailers. The thesis is divided into five parts. The first of those defines the issue of retailer-supplier relationship, especially the so called "unfair practices". The mind-set of the European Commission which judges the unfairness of a practice, according to its impact on consumer, investment and competition is stressed. When comparing market shares and profit abilities, it is obvious that supplier sector is not disadvantaged in relation to retailing, however, there are cases of small and medium enterprises over which retailers can impose their bargaining power. Retroactive changes and excessive risk transfer on a business partner are then indicated as unfair, which is confirmed by microeconomic analysis. The second part maps means of regulation, through hard and soft law in the EU and its member states with focus on the Czech Republic, where the Act No. 395/2009 Coll., on Significant Market Power in the Sale of Agricultural and Food Products and Abuse thereof is applied. It is found that regulation within the EU is heterogeneous and the results of different regulatory mechanism in different countries differ. The third part talks about self-regulatory possibilities constituted by corporate social responsibility. The main solution of retailer-supplier relationships is represented by stakeholder dialogue, in which contractual parties look for the basis of their antagonistic positions (which are hidden in their interests and needs), and try to identify mutual needs and to create shared value. This approach increases the created value, which is advantageous for both partners, instead of redistributing the value to the benefit of the stronger partner. The fourth part presents the results of a survey conducted among retailers, retailer suppliers and farmers, their opinions about the Act on Significant Market Power, about changes caused by this Act and about particular unfair practices. It was realised that the Act does not help the suppliers very much, in that the bargaining position was improved only with a tiny part of the respondents, and the Act even did not fulfil the role of small and medium sized enterprises protection. The everyday practice of retailer-supplier relationships remains (after changing few legal formulations in the contracts) almost the same as it was before the Act came into force. The only considerable change is shortening the payment period to 30 days; however, there are suppliers that are not content about this provision. The farmers do not feel any consequences of the Act; retailers regard it as business barrier and excessive regulation. Thus, this part confirms the hypothesis. The final part of the thesis proposes a solution to this issue by engaging many stakeholders: the business partners (self-regulation), the State (regulation through general universal act), consumers, non-governmental organisations and media (generating demand for responsible behaviour of firms).