EUR 100 million from the European Bank for Reconstruction and Development received Schwarz Gruppe for the development of the Kaufland network in Poland. This is yet another type of financial support for the German tycoon – in 2015, it received 900 million dollars on preferential terms. The money was spent on setting up supermarkets Kaufland and Lidl, which sparked sharp protests from Polish stores. At that time UOKiK did not notice the problem. Will it be different this time?

According to the industry website dlahandlu.pl, the decision to grant the Schwarz group, the owner of Kaufland, was made in July 2016, and the money was to be made available half a year later. It is not known whether Kaufland is already using the loan , because no official information has appeared on this matter.

The project has been classified as an investment in environmental and social impact related to the construction, modernization and operation of stores and warehouses. According to dlahl.pl, the loan specification assumes that 100 million euros are to be spent on environmental and health protection as well as work safety, as well as “operations in stores and corporate social responsibility”.

Let us remind you that in July 2015 it was revealed that the Schwarz Group, which both Lidl and Kaufland belong to, received preferential loans for approximately USD 900 million for the development of a chain of stores in Poland and other countries of Central and Eastern Europe. Money – on preferential terms – borrowed the World Bank and EBRD.

To authenticate and meet the formal requirements, Lidl and Kaufland preferential loans were officially awarded to create new jobs, open new sales markets for local farmers and provide good quality food for the poorest. Both networks refused to comment on this matter.

 

The loan aroused protests by organizations associating Polish stores, which recognized that loans granted preferential terms for Schwarz Gruppe could have disturbed the balance of the market.

  • The issue of granting a loan in such amount to retail chains is at least amazing – said then Maciej Ptaszyński from the Polish Chamber of Commerce, which brings together small stores. – It is hard to imagine that any Polish retail network could count on a loan of even a part of this amount – he stated.

The Commercial Solidarity has turned to the Office of Competition and Consumer Protection to investigate whether there has been a breach of the unfair competition rules. Several organizations associating Polish trade joined the union’s letter in this matter.

UOKiK decided, however, that it does not intend to look at the case, because it is not his competence. The Office explained that the President of UOKiK deals with the monitoring of state aid granted in Poland, and funds from the EBRD are not public funds in the light of EU law.

Is this time UOKiK – if it will be called to the board – also recognize that there are no issues? It is worth noting that since the previous issue, the loan for the Schwarz Group has changed the president of UOKiK, who may have a different position in this matter than its predecessor.

Currently, the president of UOKiK is Marek Niechciał, whose Prime Minister Beata Szydło was appointed to the post. The fact that Niechciał may be less tolerant of approaching a loan for a German trading group may indicate the manner in which he dealt with the notification of Krystyna Pawłowicz to the Law and Justice party regarding Kaufland ads.

The latest publicly available financial data of Kaufland for 2015 shows that the company has reached a turnover of almost PLN 9 billion in Poland. The company’s turnover in recent years has increased by an average of 12 percent, which means that in 2016 they could amount to almost PLN 10 billion. It can therefore be assumed that the maximum penalty for Kaufland, about which UOKiK mentioned in the letter to the company, could amount to almost PLN 1 billion.