Food Chain Watchdog Finds No Mass Replacement of Domestic Suppliers in Mercator

Mercator, Slovenia's largest retailer, has been under additional scrutiny since it was sold to Croatian food group Agrokor last year and allegations of Slovenian suppliers being replaced have surfaced in recent weeks.

Meeting with the board of the retailer on Tuesday to check up on this, Food Chain Ombudsman Jože Podgoršek found that the number of Slovenian suppliers had not fallen drastically since the takeover. But there has been a rise in foreign suppliers, which is why there is greater competition on the shelves.

"This is probably the reason that the sale of products by Slovenian suppliers has dropped slightly," Podgoršek told the STA.

He said a bigger issue was the replacement of suppliers for Mercator's own brand products, where the consumer is hard pressed to notice the difference because the packaging remains the same.

"Since sales of own brand products represent an important share in total sales, changes in suppliers for these products can result in significant changes in the structure of the origin of products sold."

He added that even in this department it was not one-way traffic with foreign suppliers taking over production of own brand products, as there have been cases of domestic producers taking over production for Mercator from what had previously been a foreign supplier.

Slovenia's largest retailer, which controls around 30% of the market, behaves like other retailers in Slovenia and abroad. The list of suppliers is in constant flux, said Podgoršek.

"We appear to be paying a little more attention to Mercator right now since this used to be a Slovenian retailer offering mostly Slovenian food products, but now it has become a global retailer and such changes are picked up by the consumer."

Podgoršek said that the change had also brought benefits, with Mercator buying much more local produce this year than in the years before the takeover. "The trend of buying local vegetables is improving and here I can see good relations among the partners in the food chain."

While overall sales of Slovenian-made products have remained fairly constant, one exception is pork. With Slovenian pork costing 20% more on average than foreign competition, sales have fallen significantly as of late as consumers opt for the cheaper alternatives.

Source: The Slovenia Times