The Latvian Competition Council (CC) has fined “MAXIMA Latvija” SIA €1,872,805 for implementing unfair trading practices in its relations with suppliers of agricultural and food products. The decision, adopted on 31 October 2025, establishes that MAXIMA abused its market power by unilaterally changing the purchase prices of goods in violation of the Unfair Trade Practices Prohibition Law (UTPAL).
The infringement, which took place between 1 November 2021 and 7 August 2024, was identified following an investigation launched by the Competition Council on 25 July 2024. The Council found that many suppliers were economically dependent on MAXIMA, as alternative sales channels were limited and cooperation with the retailer was crucial for maintaining their business activities. With a 28% market share in 2024, MAXIMA exceeded the statutory threshold under UTPAL and was deemed a buyer with significant market power. The Council also noted that the Latvian retail sector is highly concentrated—approximately 60% of the daily consumer goods market is controlled by the three largest retailers—further reinforcing supplier dependence on major chains.
The investigation revealed that MAXIMA had systematically used its market power to exert pressure on suppliers and unilaterally impose its preferred purchase prices. Suppliers who requested price increases were often left waiting months—sometimes up to a year—for confirmation, during which they were compelled to continue deliveries at outdated prices to avoid losing a vital distribution channel. In several cases, MAXIMA not only refused proposed increases but also demanded lower prices, citing vague justifications such as “market trends” or “competitiveness.” The Council found that reductions in suppliers’ purchase prices were not reflected in lower retail prices for consumers, meaning that the financial benefits were retained entirely by MAXIMA.
The Council determined that MAXIMA employed various forms of pressure, including threats to delist products, cancel promotions, or halt orders if suppliers did not comply. It also manipulated information during negotiations by referring to unspecified market observations while refusing to provide suppliers with data necessary to evaluate the legitimacy of its pricing demands. Such practices were deemed coercive and incompatible with fair trade principles.
According to the Competition Council, the case illustrates how large retailers’ purchasing power can distort the market through the so-called “waterbed effect”—when large chains force lower prices from suppliers, who then compensate by charging smaller retailers more for the same goods. This dynamic not only disadvantages independent stores but also weakens suppliers’ incentives to innovate, improve quality, or invest in product development, ultimately harming consumers through reduced variety and slower innovation.
In addition to the financial penalty, the Competition Council has imposed a set of corrective obligations on MAXIMA. The retailer must establish clear and balanced procedures for negotiating purchase prices, ensure timely responses to suppliers’ justified requests for price adjustments, provide transparent reasoning for any price changes, and refrain from punitive actions against suppliers when price negotiations stall. These measures are designed to restore fair dealing and accountability in supplier relations.
Competition Council Chairperson Ieva Šmite emphasized the importance of fair conduct in the retail supply chain: “Unfair trading practices undermine trust and distort market balance. Retailers must exercise their market power responsibly because behind each supplier stand Latvian producers, businesses, and jobs. Using dominance to boost profits at the expense of suppliers is unacceptable.”
Šmite highlighted the importance of this case as the first decision under the Unfair Trade Practices Prohibition Law, which came into force on 1 November 2021. The ruling demonstrates both the effectiveness of the regulation and the Council’s firm stance against abusive retail practices. She encouraged suppliers to report unfair treatment by powerful buyers, stressing that active participation by suppliers helps to strengthen market integrity and ensure a fair, sustainable food supply chain.
The Competition Council reiterated its call for suppliers to report instances of unfair trading practices—either directly or anonymously—to support a transparent and balanced competitive environment in Latvia’s retail sector.