On 17 March 2020, Law No. 27,545 on supermarket shelves (Law) was published in the Official Gazette. Its purposes are (i) to contribute to price competitiveness and transparency by avoiding competition or distortions risks and (ii) to expand and promote the supply of products made by micro and small sized enterprises, especially handcrafted and regional products, and family, rural and indigenous agriculture sectors.

The main measures are:

  • Obliged Subjects: "Commercialization centers", defined by Law No. 18,425 (such as total supermarkets; supermarkets, retail chains, shopping centers, among others), unless they are micro, small or medium sized enterprises in accordance with Law 24,467.

  • Involved Products: Food, beverages, personal hygiene products, household cleaning items and those that the enforcement authority (to be determined) indicates within 90 days of the enactment of the Law.

  • Limits on the allocation of space in supermarket shelves: The Obliged Subjects shall distribute their space in the shelve (physical or virtual) among the various products involved, in accordance with the following guidelines:
    • Products from the same supplier or economic group must not be displayed in excess of 30% of the space available for similar products.
    • Products from at least five suppliers or business groups must be exhibited.
    • Specific guidelines must be followed regarding the distribution of the Involved Products on the shelf in relation to their price.
    • No fees should be charged to suppliers in exchange for shelf space.
    • Imported products should not be displayed above the percentage determined by the enforcement authority "in accordance with the capacity of the national industry to meet the demand for products, seeking to promote the growth of the industry."
    • In all cases, it is considered that the products of brands "licensed by the same commercial groups or by companies linked to or controlled by them" will be considered to be of the same brand.

  • Minimum guaranteed space for promoted products: The Obliged Subjects must guarantee in their shelves (physical and virtual) the exhibition of products to be promoted:
    • Products produced by micro and small sized enterprises or by cooperatives (according to Law 20,337) or mutual associations (according to Law 20,321) must have at least 25% of the space in the shelve and at least 50% of the space in exhibition islands and displays adjacent to the cash registers.
    • Products produced by the family, rural and indigenous agriculture (according to Law 27,118) and the popular economy sectors (according to Decree 159/2017) must have at least 5% of the space in the shelves.
    • The display of these products must be accompanied by the legend "Compre Mipyme" (Buy Micro-Small Sized Business) accompanied by the isologotype designed by the enforcement authority.

  • Regulation of contracts with suppliers: Obliged Subjects must comply with certain rules in the contracts with their suppliers. For example:
    • A deferred payment term of up to 60 calendar days must not be exceeded in the case of payments to micro and small sized companies registered in the Mipymes registry and/or in the RENAF.
    • Shall not be used as a condition the free delivery of products or below the cost of provision, or any other anti-competitive practice.
    • In their contracts with suppliers of family, rural and indigenous agriculture, should be established deferred payment terms of no more than 30 days and flexible schemes, delivery facilities and commercialization.
  • Code of Good Practices: The enforcement authority shall prepare a Good Practices Code, which is mandatory for the Obliged Subjects, depending on their annual turnover of more than 300 million mobile units of the Antitrust Law. This Code shall provide, at least, a designated responsible person that will ensure the compliance with the practices, an alternative procedure for resolution disputes, and the submission of periodic affidavits.

  • Non-compliance, Sanctions and Inspection: The procedures and sanctions of the Fair Trade Regime shall be applied, without prejudice to the sanctions that may correspond in accordance with the Consumer Protection Law and Antitrust Law. Associations, business chambers and cooperatives of preferred food producers, as well as consumer associations, may control compliance.

  • Exceptions: Obliged Subjects can be exempted from the fulfillment of obligations in two cases:
    • For up to 30 days, extendable by the same period, when it is temporarily impossible to comply with the minimum limits for local products.
    • When the enforcement authority, after publishing an offer to obtain local suppliers, declares the factual impossibility of offering the products that the law seeks to encourage.

  • Regulation: The Law does not provide a time limit for its regulation, which is essential because it will determine various operational aspects necessary for compliance. However, 90 days from its promulgation were set aside for the National Executive Power, or the enforcement authority designated by it, to draw up a list of categories of products covered by the regulated entities and to determine the means of advertising them. It will also be possible for the regulations to regulate issues such as specific restrictions on the display of imported products.

  • The Law is a matter of public order, so the parties may not deviate from its provisions.

  • The Obliged Subjects will have 120 calendar days from its enactment (16 March 2020) to comply with its provisions.

  • Since neither the Law nor the Decree expressly provide for it, the Law will enter into force on 25 March 2020 (from the eighth day after its publication in the Official Gazette).
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