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Polish government to draft bill to limit private labels by large retailers

Bill seeks to reduce capacity of large retailers to sell products under their own brand

This article is powered by EU Food Law

Polish Prime Minister Mateusz Morawiecki has announced his government will draft a bill that will "make it more difficult for large retailers to sell products under their private labels" in a bid to increase the profit margins of Polish food producers that supply their products to retail chains.

"We want to propose a bill that will reduce, in an obligatory way and in reality, not like the regulations that are currently in place, the capacity of large-surface retailers to sell … products under their own brands," Morawiecki said at a recent agricultural industry event, as quoted by local daily Gazeta Wyborcza.

The initiative would mark another legislative proposal that could exert negative impact on local retailers’ revenues after the country’s Sunday shopping ban, initiated on 1 March 2018. In its first year, the measure covered two Sundays per month. In 2019, the ban extends to three days per month, and next year, it will cover four Sundays per month, with the exception of seven Sundays in January, April, June, and August, two days in December, and the Sunday that precedes Easter.

Data from local consultancy PMR indicates that, in 2018, Poland-based retail chains sold about PLN 49.8 billion (€11.58 billion) worth of products under their private labels, an increase of 6% compared with a year earlier. It is also noteworthy that, in the coming years, the market segment is expected to report a higher growth rate than the entire Polish food market, according to the consultancy.

Portuguese-owned discount store chain Biedronka dominates the country’s private label market, with sales of some PLN 20.1 billion (€4.67 billion) in 2017. This said, over the past ten years, the retailer has decreased the share of its revenues generated by such products from 58% to 40%, according to PMR.

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