Recent Development
The Ministry of Trade (“Ministry“) published the Regulation Amending the Regulation on the Principles and Rules on Retail Trade (“Regulation“) in the Official Gazette dated 14 December 2023 and numbered 32399. The Regulation will enter into force on 1 January 2024. The Regulation is available here (in Turkish).
What does the Regulation introduce?
The main amendments introduced by the Regulation are as follows:
A. Developments on unfair commercial practices
“Unfair commercial practices” are defined as activities that significantly disrupt commercial activities, reduce the ability to make reasonable decisions or cause one of the parties to be a party to a commercial relationship that it would not normally be a party to in commercial relations between producers, suppliers and retail enterprises. Unfair commercial practices in the supply chain are prohibited.
Although not limited in number, the following practices are stated as examples of unfair commercial practices:
- Reflecting the costs related to administrative and criminal sanctions or customer complaints, except when caused by the fault of the other party,
- Carrying out 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 noncompliance, based on objective criteria such as failure to comply with the agreed delivery date or 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 the essential issues related to its products and activities,
- Returning agricultural and food products that are perishable within 30 days from the date of production, except for fast-moving consumer goods whose maximum prices are determined by tariff, on the grounds that they cannot be sold after delivery or transfer of ownership.
The following activities shall be considered unfair commercial practices in all cases:
- Forcing the supply of goods or services from any real or legal person, except for conditions such as product content and technology to be used, which are included in the contract to ensure quality standards,
- Reflecting the cost of the campaign to a party that does not want to make campaign sales,
- Failing 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 demonstrate the agreement between the parties,
- Including provisions in the contract that authorize unilateral changes to the detriment of the other party or that are not clear and understandable in material issues such as maturity, return and campaign conditions,
- Receiving premiums and fees even though it does not provide any service that directly affects 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 receiving premiums and fees under the names of store opening and renovation, turnover deficit, bank and credit card participation fee, and other names,
- Canceling orders for agricultural and food products that are perishable within 30 days from the date of production within 30 days prior to the delivery date of the product, except in cases caused by the fault of the other party,
- Reflecting the costs of spoilage or loss after delivery or transfer of ownership of agricultural and food products that are perishable within 30 days from the date of production, except where caused by the fault of the other party.
B. Developments on payment terms
Payments arising from commercial relations between producers, suppliers and retail enterprises must be made within the period stipulated in the contract.
Payment terms for agricultural and food products that can spoil within 30 days from the date of production shall not exceed 30 days if the creditor is smaller in scale than the debtor, and 45 days in other cases.
For agricultural and food products that do not spoil within 30 days from the date of production, the payment periods shall not exceed 60 days if the creditor is smaller in scale than the debtor.
If the payment is made by check, the validity period must be within the above-mentioned periods. If the payment is made by post-dated instruments, the maturity date must be within the above-mentioned periods.
The above payment periods shall be calculated based on the date of delivery or transfer of ownership, whichever comes first. In calculating the payment period for partial deliveries or transfers, each delivery or transfer will be taken into account separately.
Micro, small and medium-scale enterprises will be classified in accordance with the Small and Medium Sized Enterprises Regulation. To determine the scale, the debtor shall be obliged to request from the creditor the Enterprise Class and SME Qualification Certificate issued through the e-Government portal, showing the scale of the enterprise. The debtor shall also be obliged to provide this document to the creditor for its own enterprise.
The duration of payments made by employers to organizations providing meal card services and to retail establishments contracted by these organizations shall not exceed 30 days. This period shall start from the date that the invoice issued by the relevant parties.
C. Development on shelf allocation
The Ministry shall be authorized to impose an obligation to sell food products for diseases requiring medical nutrition treatment in chain stores with more than 200 branches whose main business activity is the sale of fast-moving consumer goods, to be applied in branches with a sales area of more than 250 square meters.
Conclusion
With the amendments made by the Regulation, which aims to explain the implementation principles regarding the amendments made to Law No. 6585 on the Regulation of Retail Trade on 1 February 2023, the unlawfulness of unfair commercial practices encountered in the supply chain is clearly regulated, but the examples of unfair commercial practices are not limited. Regarding payment terms, the legislator aims to protect small and medium-scale enterprises engaged in agriculture and food products against large-scale enterprises, in addition to imposing legal upper limits on the terms agreed on in the agreements between the parties for these enterprises to collect their receivables in terms appropriate to their commercial needs. The Regulation also authorizes the Ministry to impose an obligation to sell food products for diseases requiring medical nutrition treatment to enterprises with more than a certain number of branches whose main business activity is the sale of fast-moving consumer goods. It is important that retail sector stakeholders carefully review the amendments introduced by the Regulation and complete their efforts to comply with the Regulation by the effective dates of the relevant regulations.
