Retailer Depo fined for price fixing, blasts official incompetence

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The Competition Council has slapped a EUR 3.7 million fine on home improvement and DIY store Depo for being involved in a retail cartel. Depo disputes the penalty and says it will appeal, reports the LETA news agency.

Depo was informed about the Competition Council's decision yesterday, October 4. The Competition Council has not yet commented its decision.

According to Depo, the Competition Council began an inspection at Depo following a probe into operations of building materials producer Knauf, which found that Knauf had been trying to have retail prices of Knauf products increased. However, Depo did not play along with Knauf's demands, the retailer says.

"Regardless of Depo's attempts to provide the Competition Council with all the necessary explanations and evidence, the Competition Council continues blaming the company for being involved in a cartel from 2006 to 2014 by setting higher retail prices for Knauf products," Depo informs, saying that the allegations are absurd.

"Depo has, of its own accord, carried out an analysis of actual retail prices for Knauf products, and can prove that, during said period, these prices differed from one store to another. Furthermore, prices at Depo stores were lower than at other stores selling construction supplies. The Competition Council has ignored these facts," Depo said in a statement.

According to Depo, the Competition Council has refused to look at any explanations provided by Depo management about the company's development strategy and market situation in 2006-2014, the company's pricing policy, and cooperation between Depo and Knauf. All of that proves the Competition Council's incompetence, and Depo will use all legal means available to have the allegations disproved.

Far from keeping prices articifically high, Depo said its chain of large warehouse stores has completely changed the retail landscape in Latvia and has driven prices down for consumers.

"We have faced incompetence and unprofessionalism on the part of the Competition Council and consider our responsibility to defend the interests of DEPO employees, customers, social and financial partners," the company said.

Depo DIY, founded in 2004, posted EUR 203.417 million in turnover last year, which is 9.41 percent more than in 2015, while the company's profit amounted to EUR 12.218 million - 14.53 percent up from 2015.

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