A promotional campaign carried out in stores of the Albert Heijn (AH) chain of supermarkets in Flanders has been ruled illegal by the inspection service of the federal finance ministry. The supermarkets distributed a brochure last month offering two free products for every purchase of a limited number of products. The “buy one, get two free” offer is unprecedented in Belgium, competitors said, and represented unfair competition. Albert Heijn – now a partner of the Delhaize chain but only operating in Flanders region – must be selling at a loss, which is illegal in Belgium but not in the company’s homeland in the Netherlands.
Industry experts were less certain: supermarkets often offer extravagant promotions on certain goods to entice shoppers into the store in the hope they will buy all of their shopping at once, now and perhaps also on future occasions.
In addition, AH supermarkets in Belgium are supplied by AH distribution in the Netherlands, so in theory, the parent company could be selling the products to its Belgian division at a loss legally, allowing AH in Flanders to sell at an extremely low price while remaining within the law.
The economic inspection unit, called into the matter by consumer affairs minister Kris Peeters, took none of those arguments on board. By carrying out a document search of AH headquarters in Belgium, they determined that the chain was indeed selling at a loss.
The chain will now have the opportunity to come to an agreement with the inspectors or face legal action.
“Low prices are good for the consumer, but selling at a loss makes normal competition impossible,” Peeters commented. “The major chains can use it to eliminate smaller competitors and achieve domination of the market. We can’t allow that to happen.”
AH said it would wait to see the judgement in detail. “Our pricing policy is set up so as to be in line with the law,” said spokesperson Maarten Van Tartwijk to Het Laatste Nieuws. “We are now waiting for a formal notification from the ministry.”
Meanwhile, an article in De Tijd newspaper (paywall) reports that inspectors had at one point concluded that only two products from the 28 involved in the promotion were being sold at a loss. The promotional offer has meanwhile expired.