C. 23-13 th
El Salvador, September 25 , 2013.
CS studies competition in markets and supermarkets The Competition Superintendence (CS) has begun a study on the competition conditions in retail distribution mainly in supermarkets and municipal markets of the country. The CS seeks to diagnose this economic activity, and, pursuant to the results of said study, issue public policy recommendations that contribute to strengthen competition. “Markets and supermarkets are the main suppliers of major consumption goods to the population. The CS must study the competition conditions in this sector to issue recommendations, if deemed necessary”, asserted Francisco Diaz Rodriguez, Competition Superintendent.
The Competition Superintendence has initiated a study on how retail distribution of the most important goods for the population´s consumption works. The results of the aforementioned study will allow the CS to issue conclusions and recommendations which will contribute to remove possible obstacles, if they exist, favoring more market competition. Retail distribution in markets and supermarkets is important as an economic activity both in the interaction with suppliers, being the intermediary that allows the transfer of their goods to consumers, and in its influence in consumers, determining their consumption patterns through the supply of good offered and final prices. The relevance of assessing the competition conditions of retail distribution has been 1 acknowledged by various studies on the same topic from different viewpoints . The consulted studies recognize that certain competition problems may originate, amongst other causes, in the concentrated structure (with few competitors) of storebrands and the privileged position of supermarkets compared to that of suppliers and of the rest of competitors.
The study will include the retail distribution of a basket of eight groups of products chosen pursuant to their 2 importance in the total expenditure of Salvadoran homes and in the commercial activity of retail distributors, which have been called periodic consumption products in homes (PCP, Salvadoran acronym) and include: 1) staple foods; 2) groceries; 3) cured and processed meats; 4) dairy products; 5) home cleaning products and clothing; 6) fresh vegetables; 7) personal hygiene products; and, 8) Fresh and frozen meats. Mr. Eugenio Rivera, PhD, Chilean consultant, will execute the study. He has vast experience in competition and regulation topics of diverse economic activities, amongst other subjects. rd
Mr. Rivera will be conducting his first visit to the country, from September 23 to the 27 , in order to collect necessary information to carry out the study. For said purpose, the consultant and the Competition Several competition studies have been carried out on the importance of supermarkets. Amongst them: National Competition Commission; A. Gomez-Lobo and A. González; “Report on the relationships between manufacturers and distributors in the food sector”; Spain; 2011. Seely; “The relationship between food prices and supermarkets in mergers and acquisitions in Chile”; Chile; 2011. “Supermarkets: Competition enquiries into the groceries market”; United Kingdom. 1
Statistics and Surveys General Division; “Survey of multi-purpose homes”; El Salvador; 2011.
Superintendence´ team, his counterpart, will be carrying on interviews with representatives of supermarkets, industries, and consumption goods distributors; municipal markets; consumer associations, and public institutions such as the Consumer Protection Authority and the Ministry of Economy´s Statistics and Surveys General Division. The above cited study will be concluded in the first trimester of 2014. Legal framework With respect to market studies, Provision 4 of the Competition Law (CL) states: “…The Competition Superintendence shall have the purpose to look after the compliance of the Competition Law, by means of a technical, legal, and economic analysis system, complemented by support studies and other pertinent activities to perform its activities in an optimum manner”. Provision 13 letter c) of the CL lists amongst the Superintendent´s attributions, the following: “c) Order and contract periodically the realization of market studies and specific consultancies of technical aspects necessary to fulfill the objectives herein; the results of said studies may be published”.