The stores of the K-Group and the S-Group combined account for around 80% of retail grocery sales in the country. Changes to fair competition legislation now being considered by Parliament define a company as having a dominant market position if it has a share of the market in excess of 30%. The new law is likely to come into force in the autumn.
Same bonuses for all
Pertti Virtanen, Professor of Business Law at the University of Tampere, believes that the new legislation will require an overhaul of the preferred customer benefits that chain stores offer.
At present, the preferred customer system encourages customers to make most of their purchases from the stores of just one chain. Virtanen thinks that once new regulations are in place, the national competition authority will move to end the practice of providing a rising scale of bonuses based on how much customers spend.
The K-Group and the S-Group have been highly critical of the upcoming changes. They say that interpretation of the law will not be easy and that it will reduce flexibility in the market. Neither company, however, is certain how it will impact their preferred customer bonus programmes.
