1 April 2020 – Aiming to alleviate the impact of the COVID-19 pandemic, the Romanian Senate has approved on 31 March 2020 a draft law introducing a temporary price ceiling for certain essential products (“the Draft Law”).
As per the Draft Law, prices will be capped at the production/import price levels plus a total mark-up of no more than 10% on the entire distribution and retail chain for products related to the state of emergency declared in Romania and more precisely:
- OTC drugs included in the treatment protocol of the infection with the SARS-CoV-2 virus, as approved by the Romanian Ministry of Health;
- medical devices used for protection;
- sanitary equipment; and
- certain food supplements.
The Draft Law also includes similar provisions as regards the capping of prices for essential food products.
The measures would be applicable during the state of emergency and for a period of no more than 90 days after its cessation. The Draft Law does not include any further clarifications on the above but only provides that implementing norms would be adopted through a joint order of the ministers of economy and public finance within 10 days following its entry into force.
Breaching the above caps would be sanctioned with an administrative fine of at least RON 5 million (approx. EUR 1 million) but not more than 4% of the infringing party’s turnover and the Romanian Competition Council would be entrusted with applying the sanctions.
The Draft Law has already been sent to the Chamber of Deputies for debate and final approval and it appears that there is political momentum for the adoption of a final text on a rather short notice.
The current text on how the price ceilings would apply is rather vague and could lead to uncertainty in its application. Furthermore, it is not at all clear how companies would comply with the total mark-up of no more than 10% on the entire distribution and retail chain, without entering into exchange of sensitive competitive information or breaching competition law in respect of resale price maintenance. Therefore, should the current text be adopted in its current form, particular attention should be given by companies to compliance with competition rules.
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