Stores hold on to fines // Suppliers ask Auchan to honor agreements

A new scandal is brewing in the Russian retail market. Rusprodsoyuz appealed to the Russian branch of Auchan with a request to intervene in the situation with fines that were charged to suppliers, despite the moratorium on sanctions in force in the first year of the pandemic. The association does not exclude the filing of a class action lawsuit by the retailer’s counterparties.

Kommersant has at its disposal a letter from the executive director of the Rusprodsoyuz association Dmitry Vostrikov to the head of the Russian Auchan Ivan Martinovich, where it is reported that in 2020 the members of the association “began to massively receive fines that had previously been canceled (written off – “BThe retailer, Mr. Vostrikov continues, imposed sanctions in the face of the rush demand for food due to the COVID-19 pandemic, despite the moratorium announced by the Association of Retail Companies (ACORT).

According to Dmitry Leonov, deputy chairman of the board of Rusprodsoyuz, suppliers received fines of millions of rubles for erroneous orders from the chain, canceled orders agreed with the retailer, positions closed by the supplier, etc. As noted in the association, all situations for which suppliers received fines have been agreed with Auchan employees, which is confirmed by official correspondence with the retailer. Rusprodsoyuz is considering filing a class action lawsuit against the network for similar claims. They note that the main source of profit for a retail company should be a margin, and not penalties to counterparties.

Such actions are unacceptable for members of AKORT, which includes Auchan, according to the association. AKORT did not provide comments.

Russian Auchan said there was no detailed information in the letter from Rusprodsoyuz. “We are now understanding the situation and hope for more specific information from Rusprodsoyuz on the suppliers affected by this problem,” they said, assuring that all early agreements remain in force, as well as the moratorium on fines. The network promised to discuss each situation in private. “If problems arose due to a technical error, then we will try to solve it as soon as possible,” added an Auchan representative. A Kommersant source in the retail market believes that such actions of the retail chain may be associated with a change in management in February this year and the corresponding restructuring of business processes.

The head of Vertical projects, lawyer Alina Khammatova, says that resolving the dispute will require the absence of any formal violations on the part of Auchan’s suppliers and documentary evidence of an agreement to exempt from penalties. Timur Bayazitov, deputy chairman of the Korchago & Partners Bar Association, adds that counterparties must certify all letters that suppliers sent by e-mail. And Vyacheslav Kosakov, managing partner of the legal group Novator, reminds that the collection of the evidence base remains with the suppliers.

Rusbrand’s executive director Alexei Popovichev notes that negotiations between suppliers and chains are always difficult, and fines are one of the most pressing issues in relations between the parties. According to a Kommersant source in a large food company, Auchan is unlikely to refuse to charge fines, even if it turns out that this was a mistake on his part.

Anatoly Kostyrev

Leave a Reply

Your email address will not be published. Required fields are marked *