Can a supermarket dictate prices? And what if it refuses to purchase goods altogether? The Act on significant market power.

Mgr. Vojtěch Sucharda
Mgr. Vojtěch Sucharda
30.3.2026 | ARROWS law firm

Are you a supplier of agricultural products or food, and a major retail chain suddenly tells you that it will dictate purchase prices, or even refuses to buy your goods without justification? In this article, we explain what is and is not lawful under Czech legislation, what rights you have, and how to protect yourself. The law protects suppliers, but the rules are complex—and the risks often lie in the details.

The photo shows a lawyer discussing the issue of unfair commercial practices by retail chains.

Quick summary

  • Supermarkets and buyers with so-called significant market power must not dictate disadvantageous terms, act dishonestly, or abuse their strong position against suppliers.
  • The legislation has undergone a fundamental reform and, in 2026, is now fully established, protecting not only small farmers but the entire supply chain based on turnover criteria.
  • If a supermarket behaves unfairly, forces payments without consideration, fails to comply with payment terms, or threatens delisting, you have strong legal tools and need to act quickly.
  • The attorneys at ARROWS advokátní kancelář handle these disputes and can secure protection of your rights – from contract reviews and defence before the Office for the Protection of Competition (ÚOHS) to negotiations with the other party.

Why legal regulation of relationships between supermarkets and suppliers matters

Imagine a situation where you produce high-quality Czech honey that is sold across the country. A large supermarket with a strong position in your region suddenly informs you of a price requirement that will not even cover your costs. On top of that, it adds demands for payments for marketing, audits and logistics fees, under the threat of being removed from the product range.

It is precisely for these situations that the Act on significant market power exists, specifically the Act on significant market power in the sale of agricultural and food products. Its purpose is to protect suppliers from a stronger business partner abusing its market position to exert pressure, exploit them, and set unfair terms.

In practice, this is one of the key areas of market regulation. If you need to assess an abuse of significant market power also from the perspective of competition rules and proceedings before ÚOHS, it may be useful to contact the team for international law. The attorneys at ARROWS advokátní kancelář encounter these disputes regularly – and we know how to defend against them and how to negotiate fair terms in line with current Czech legislation. If the dispute escalates or you need to choose a procedural strategy, support within commercial and litigation disputes can also help.

How legal protection for suppliers emerged and what applies in 2026

The Act on significant market power has existed in the Czech Republic for many years, but in 2023 it underwent a major amendment that transposed the European directive on unfair trading practices (UTP Directive). This framework is now, in 2026, fully settled, and ÚOHS actively issues decisions under it.

What is most important? Previously, the Act primarily targeted the largest chains with turnover above CZK 5 billion; now, however, the so-called concept of relative market power applies. Protection applies to suppliers depending on their size relative to the buyer.

This means that even if you are a smaller producer supplying a medium-sized wholesaler or distributor, you may have legal protection. The Act protects suppliers throughout the entire food chain, and the key point is that the buyer must not abuse its significantly stronger position.

Which supermarkets and distributors fall under the Act

The rules for determining significant market power are set by turnover bands. The Act applies to buyers (supermarkets, distributors, wholesalers) if their annual turnover in the Czech Republic exceeds EUR 2 million (approx. CZK 50 million) and, at the same time, that buyer falls into a “larger” category than the supplier under the Act.

Simplified, protection is triggered in these bands based on annual turnover:

  • Buyer > EUR 2 million and supplier < EUR 2 million.
  • Buyer > EUR 10 million and supplier < EUR 10 million.
  • Buyer > EUR 50 million and supplier < EUR 50 million.
  • Buyer > EUR 150 million and supplier < EUR 150 million.
  • Buyer > EUR 350 million.

In practice, this means that the Act applies to:

  • All large retail chains.
  • Major online food retailers.
  • Large distributors and wholesalers of agricultural products.

How a supermarket dictates prices and why it is not legal

It is necessary to distinguish between two situations, because a supermarket cannot determine the price at which you will sell elsewhere, as that would be a cartel. For setting contractual rules (e.g., price changes, bonuses, payment terms and penalties), it makes sense to use legal support in the area of contracts and negotiations. In the context of significant market power, however, the issue is whether the supermarket forces you to supply at unreasonably low purchase prices or reduces the price through additional fees imposed afterwards.

Practical examples of prohibited practices

If a supermarket informs you that from next month it is reducing the purchase price by 10% and, if you do not accept, you are out, this may constitute an abuse of market power. If such a change is forced unilaterally and without justification, it is not in line with the law. When a supplier is considering whether to pursue internal escalation, a supervisory complaint, or a dispute, it may be useful to compare the approach with practical tips in External legal services from a law firm in Prague: Practical tips.

Another case is so-called benchmarking against competitors, where the buyer demands that you match a competitor’s discount under the threat of delisting. Pressure to offer the lowest price under the threat of delisting may be assessed as an unfair practice.

The Act also expressly prohibits agreeing on or applying contractual terms that create a significant imbalance in the parties’ rights and obligations. A common situation is also where the price remains the same, but the supermarket requires payment of a percentage of turnover as a logistics bonus without any real consideration.

Related pricing questions
  • Can a supermarket require a supplier not to offer a better price to its other partners? So-called “most-favoured-nation” (MFN) clauses can be problematic from the perspective of competition law and significant market power under Czech legislation if they restrict the supplier’s commercial strategy.
  • What if a supermarket says that if you do not compete on price, you will not be on the shelves? Commercial negotiations on price are common. The legal line is crossed if the pressure is disproportionate, there are threats of immediate termination of cooperation without a notice period, or the price is pushed below the supplier’s level of economic sustainability.

What an unfair trading practice means in the context of supermarkets

The Czech Act on Significant Market Power defines specific types of unfair practices. We divide them into two groups.

1. Practices prohibited in all cases (Black list):

These practices are illegal under all circumstances:

  • Invoice payment terms longer than 30 days for agricultural and food products.
  • Cancellation of an order for products subject to rapid deterioration less than 30 days before delivery.
  • Unilateral changes to contract terms without prior agreement.
  • Requests for payments that are not related to the sale of the supplier’s products.
  • A requirement to pay for deterioration or loss of products after title has passed.
  • Refusal to provide written confirmation of the contract terms.
  • Misuse of the supplier’s trade secrets.
  • Threats of commercial retaliation.

2. Practices prohibited unless agreed in advance (Grey list):

The following practices are prohibited unless they have been clearly agreed in advance in writing in the contract:

  • Returning unsold products to the supplier without payment.
  • Fees for listing products (so-called shelf fees).
  • Reimbursement of the buyer’s costs for discount promotions.
  • Payments for advertising and marketing carried out by the buyer.
  • Payments for the buyer’s staff fitting out premises for sale.

What happens if a supermarket simply does not take delivery of the goods

This situation is very risky, especially for goods that spoil quickly, such as dairy products, meat, or fruit and vegetables. The Czech Act on Significant Market Power provides that the buyer must not cancel an order for agricultural or food products subject to rapid deterioration less than 30 days before the scheduled delivery.

In addition, a general clause applies that prohibits any conduct contrary to good faith and fair dealing. This includes, for example, unjustified delisting, where a supermarket ends cooperation with you “overnight” without a contractual notice period or without a substantive reason.

Of course, a supermarket may reject defective goods, but it must proceed in accordance with the law and the contract. Our attorneys in Prague at ARROWS often help clients in such cases to assert claims for damages for spoiled goods and lost profit.

Risk and solution table

Risks and penalties

How ARROWS can help (office@arws.cz)

Imposing prices without the possibility of negotiation

Contract review and legal advice

Long payment terms (over 30 days)

Debt recovery and interest claims

Threats of delisting

Protection against retaliatory measures

Unjustified fees (marketing, logistics)

Legal audit of fees

Unilateral contract changes

Defence against invalid changes

What penalties a supermarket faces if it behaves unfairly

If the Office for the Protection of Competition (ÚOHS) finds a breach of the law, the penalties are draconian.

  • Fine of up to 10% of net turnover: The fine is not calculated only from turnover in the Czech Republic and can reach enormous amounts. In less serious cases, it may be up to CZK 10,000,000.
  • Corrective measures: ÚOHS may order the removal of the unlawful situation, for example by amending contracts or paying outstanding amounts.
  • Reputational risk: ÚOHS decisions are public, and information that a chain is bullying suppliers damages the brand in the eyes of customers.

How to protect yourself preventively through a contract

The best defence is prevention, which is why Czech law requires that a contract between a supplier and a buyer with significant market power be in writing.

  • Have the contract reviewed: The contract must contain a clearly defined purchase price, invoice maturity of no more than 30 days, and the exact scope and price of any services.
  • Have a lawyer on your side: Supermarkets have entire legal departments; you need an expert who knows the Czech Act on Significant Market Power. The legal team at ARROWS, a Prague-based law firm, will ensure that your contracts do not contain hidden traps.
  • Documentation: Keep all communication about prices, pressure, or changes to terms, as it is key evidence for any potential proceedings.

How long dispute resolution takes

Dispute resolution usually has three phases, which differ in time requirements and impact.

  • Pre-action notice and negotiations: A lawyer’s involvement often changes the dynamics, and most disputes can be settled out of court within weeks.
  • Administrative proceedings before ÚOHS: If you file a complaint with the authority, it will open an investigation, which may take several months up to a year.
  • Court proceedings for damages: If you have suffered financial loss, we pursue it in court, with proceedings typically taking 1–3 years.

Practical examples and typical breaches of the law

Here are examples of conduct that ÚOHS has penalised in the past or that constitutes a typical breach of the law.

A retail chain required suppliers to pay fees simply for having their goods accepted for sale, without providing any real consideration in return. A large buyer systematically paid invoices to its suppliers only after 60 or 90 days, even though the law strictly sets 30 days.

Another example is a situation where a chain forced suppliers of seasonal goods to take back everything that did not sell and refund the money. This is a typical “grey practice” that is prohibited without prior written agreement.

How to start defending yourself step by step

If you are in a situation where a buyer is imposing unlawful terms on you, proceed as follows:

  1. Gather evidence: Prepare the contracts, their amendments, email correspondence, and an overview of unpaid invoices.
  2. Contact professionals: Do not act emotionally and let the attorneys from ARROWS, a Prague-based law firm, assess whether a breach of Czech law has occurred.
  3. Choose a strategy: Together we will decide whether to send a pre-action demand letter, submit a complaint to the Office for the Protection of Competition (ÚOHS), or file a claim for damages.

The Act on Significant Market Power exists to level the playing field between small suppliers and large retail chains. If you feel you are being treated unfairly, the law is likely being breached.

Do not be afraid to speak up, because passivity and fear of losing a customer often lead to further deterioration of the terms. With high-quality legal representation, the partnership can be brought back within fair boundaries.

If you are dealing with issues with a retail chain, do not hesitate to contact us at office@arws.cz. We will be happy to discuss your options with you and propose an effective course of action.

FAQ – Most common legal questions regarding the Act on Significant Market Power

1. What if I only have an oral agreement with the chain?
That is a problem for the chain. The Act on Significant Market Power requires the contract to be concluded in writing. If a written contract is missing, the buyer commits an administrative offence and you are entitled to have the relationship contractually formalised.

2. Can I submit a complaint to ÚOHS anonymously?
Yes, a submission to the Office for the Protection of Competition can be made in a way that protects your identity if you are concerned about retaliatory measures. The Office is obliged to keep the complainant’s identity confidential if requested.

3. Does the Act also apply to foreign retail chains?
Yes, if they operate on the Czech market and purchase goods for sale in the Czech Republic, they are subject to the Czech Act on Significant Market Power, regardless of where they are headquartered.

4. What if the supermarket claims the fee is for marketing, but I have not seen any advertising?
If a service was invoiced but not provided, this is a breach of Czech law. You have the right to request evidence that the service was performed, and if the chain fails to provide it, this constitutes unjust enrichment and a potential administrative offence.

5. Is the 30-day payment term absolute?
For supplies of agricultural and food products, yes. Any contractual arrangement for a longer period is invalid; the statutory period applies, and if the chain pays you later, you are entitled to default interest.

Notice: The information contained in this article is of a general informational nature only and is intended for basic guidance on the topic under the legal framework as of 2026. Although we take the utmost care to ensure accuracy, legal regulations and their interpretation evolve over time. We are ARROWS, a Prague-based law firm, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client protection we maintain professional liability insurance with a limit of CZK 400,000,000. To verify the current wording of regulations and their application to your specific situation, it is necessary to contact ARROWS, a Prague-based law firm, directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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