Unfair competition in the market for the sale of food products: trends and negative consequences for product manufacturers

Abstract

When we research the competitive positions of economic entities, we must assess the level of pressure of all five forces of the competitive environment. We should not only study the balance of power of competitors in the industry. Retail chains show unfair competition in relation to suppliers of agricultural products and food products. The problem has existed for many years. At the beginning of the war, product supply chains were disrupted. Therefore, stores began to pay for the delivered goods faster. However, by the end of 2022, the problem returned. Retail chains do not fulfill the terms of the concluded contracts. They use their monopoly position and delay payments for the received goods for several months. More than 70 % of food products are sold through retail chains. That's why producers are forced to agree to cooperation with unprofitable partners. Accounts receivable of milk processing enterprises is studied in the article. Most of the products of such enterprises are perishable and sold within a few days. At the same time, the receivables are paid after 1–2 months. Milk processing enterprises try to solve the problem by diversifying buyers. This leads to an increase in doubtful and bad debts. The legislation of European countries recognizes such actions of retail chains as unfair trade practices. Ukrainian legislation does not classify the actions of retail chains as unfair competition. Currently, Ukrainian legislation is being implemented to the standards of the European Union. We hope that this will protect the rights of product manufacturers and it will create prerequisites for the development of Ukraine's economy.

Keywords

• retail chains
• payment delay
• competitive positions
• unfair competition
• unfair trade practices
• late payment