An investigation into claims that retailers including Tesco, Auchan, Aldi, Lidl, Spar and CBA may have colluded to fix the price of fresh watermelons sold in Hungary could be prevented from advancing any further if a proposed change to the law is approved.
According to International Law Office, the requested amendment to Hungary's Agricultural Associations and Procedures Act would stop the country's Competition Office (GVH) from pursuing the investigation as it would allow for companies to be deemed not to have engaged in anti-competitive behaviour "if the agreement attempts to guarantee fair and equitable income for the parties thereto".
Hungarian watermelon suppliers have long campaigned for restrictions to be placed on cheaper foreign imports, which they argue are sold as domestic produce in many cases so they can attract a higher price.
Earlier this year, the Hungarian ministry of agriculture joined the country's Watermelon Association and Fruit and Vegetable Authority in talks with producers, retailers and grower organisations aimed at developing a more transparent trading system.
Gyula Budai, state secretary for rural development, personally launched a campaign in partnership with several retailers that he said promised to sell Hungarian-grown watermelons at a set minimum price, thereby securing a profit for Hungarian growers.
"In particular, ministry officials – in line with recommendations from industrial and farmers associations – 'asked' retailers to commence and finish the watermelon season at a retail price level that was substantially equivalent to that of the 2011 season and not to purchase watermelon for resale from foreign sources," commented Álmos Papp, partner at Budapest-based law firm Bán S Szabó & Partners.
"While officially it was never confirmed, some sources claim that the ministry even fixed the minimum resale price of watermelons at Ft99 (approximately €0.30) per kilogram," he added.
With the GVH regarding such action as anti-competitive, despite many retailers continuing to sell the fruit at much lower prices than rate allegedly agreed, it alunched the investigation.
However, that move could be blocked if Hungary's parliament approves the amendment.
More information on the ILO website (registration required).
