Significant Changes to the Retail Trade Regulations
Significant Changes to the Retail Trade Regulations
The Regulation Amending the Regulation on Principles and Rules to be Applied in Retail Trade ("Amending Regulation") published in the Official Gazette dated December 14, 2023, and numbered 32399, introduced certain amendments to the Regulation on Principles and Rules to be Applied in Retail Trade published in the Official Gazette dated 06.08.2016 and numbered 29793. These mainly cover (i) unfair commercial practices in the supply chain and (ii) payments related to commercial activities between the producer, supplier, and retail business.
The Amending Regulation redefines the unfair commercial practices in commercial relations between producers, suppliers and retail businesses and sets forth regulations in parallel with the unfair commercial practices regulated under the Law No. 6585 on the Regulation of Retail Trade. In addition to these regulations, commercial enterprises are also defined according to their size.
A. Regulations Introduced by the Regulation on Unfair Commercial Practices in the Supply Chain
The Regulation defines unfair commercial practices as "practices that disrupt the balance in commercial relations between producers, suppliers and retail businesses and create unfair results". The Regulation specifies "practices that are considered unfair commercial practices in all cases" and then enumerates various activities as examples of unfair commercial practices.
a. Practices Considered Unfair Commercial Practices in All Cases:
- To force the procurement of goods or services from any real or legal person, except for the conditions such as product content and technology to be used in the contract to ensure quality standards.
- Reflecting the cost of the campaign to the party that does not want to make campaign sales.
- Failure to determine the terms of the commercial relationship in the supply of agricultural and food products by written contract or by e-mail, fax or other written means in electronic media that can show the agreement between the parties.
- Including provisions in the contract that authorise unilateral changes to the detriment of the other party or that are not clear and understandable in essential matters such as maturity, return and campaign conditions.
- To receive premiums and fees even though it does not provide any service that directly affects the product demand such as promotional services in the form of activities, advertisements, magazines, announcements and similar forms or special positioning services in display units and does not specify the type, duration and/or number of services provided and the amount or rate of the service fee in the contract, or to receive premiums and fees under the names of store opening and renovation, turnover deficit, bank and credit card participation fee and other names.
- To cancel orders for agricultural and food products that are perishable within thirty days from the date of production, within thirty days prior to the delivery date of the product, except in cases caused by the fault of the other party.
- To reflect the costs of spoilage or loss after delivery or transfer of ownership of agricultural and food products that are perishable within thirty days from the date of production, except in cases caused by the fault of the other party.
b. Activities Specified as Examples of Unfair Commercial Practice:
- To reflect the costs related to administrative and criminal sanctions or customer complaints, except in cases arising from the fault of the counterparty.
- To take commercial reprisals such as removing products from the list, reducing the amount of products ordered, stopping marketing or campaign-like services related to these products or imposing financial obligations on the grounds that the provisions to be applied in cases of non-compliance based on objective criteria such as failure to comply with the agreed delivery date, failure to meet the product quality and storage conditions are not included in the contract or on the grounds that an application has been made to public institutions or judicial authorities.
- Causing damage to the counterparty by making untrue or misleading statements or notifications regarding the scale of the enterprise and its products and activities.
- To return agricultural and food products that are perishable within 30 days from the date of production, except for fast-moving consumer goods specified in the first paragraph of Article 12/C of the Regulation on Principles and Rules to be Applied in Retail Trade, on the grounds that they cannot be sold after delivery or transfer of ownership.
B. Regulations on Payment Introduced by the Amending Regulation
The Amending Regulation stipulates that payments subject to retail trade must be made within the period stipulated in the contract. It is stated that payments for agricultural and food products may be made in different periods depending on the type of product, and the following distinction is stipulated:
- For the supply of agricultural and food products that are spoilable within 30 days from the date of production, the payment period may not exceed ‘30 days’ if the creditor is smaller in scale than the debtor, and ‘45 days’ in other cases.
- For the supply of agricultural and food products that do not spoil within 30 days from the date of production, the payment period is set as ’60 days’ in cases where the creditor is small, the debtor is medium or large scale or the creditor is medium, the debtor is large scale.
Additionally, while calculating the above-mentioned periods, the prior date between the date of delivery and the date of transfer of ownership will be taken as the basis, whereas each delivery date will be taken into account for partial deliveries. If the date of delivery cannot be determined, the date of issuance of the delivery note is essential. The debtor is also obliged to prove that the payment was made on time.
The regulations entered into force on January 1, 2024.
With the Amending Regulation, the Regulation on Principles and Rules to be Applied in Retail Trade dated 06.08.2016 was amended to regulate the activities that will constitute unfair commercial practices in any case, and some activities were exemplified as unfair commercial practice. Accordingly, it is aimed to reduce the disputes that may arise between the parties on payment issues, to decrease the financing costs and prices of the producer or supplier while establishing the final price by shortening the terms, and to ensure a fair balance between the parties.