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Report on the conducted sectoral analysis of the state of competition on the market of other postal services (courier services) in the period from 2019-2021

kzkPursuant to Article 47 of the Law on the Protection of Competition and the Decision of the Council, the Commission conducted a sectoral analysis of the state of competition on the market of other postal services.

The subject of the analysis was the determination of the relationship between the main market competitor of other postal services, courier services, which entailed the assessment of their market shares and relative strength, as well as the analysis of contractual relations between users and service providers, the commercial policy of service providers and the relevant regulatory framework.

The development of electronic commerce in the Republic of Serbia resulted in an increase in the volume (number) of postal shipments, especially in the parcel delivery segment, as well as express shipments. The development of the sector of other postal services significantly affects the operations of all economic entities. Large business entities aim to separate secondary activities from the main ones, leaving a large part of them to postal operators. Small and medium-sized enterprises are given the opportunity to develop their own value chains through cooperation with postal operators. However, by limiting competition between postal operators, bottlenecks can be created in the distribution channels of the retail sector.

The main objective of the sectoral analysis was to look at the state and dynamics of competition on the market in question, as well as to identify the possible problems in terms of potential limitations that affect the level of competition.
The Commission would like to thank all market participants who provided the requested information in the course of the analysis.

Sectoral analysis of the state of competition on the textbook market for primary education conducted

kzkPursuant to Article 47 of the Law on Protection of Competition, the Commission for Protection of Competition conducted a sectoral analysis of the state of competition on the market of textbooks for primary education in the Republic of Serbia in the period from 2018-2020.

The commission identified the need to analyze the state of competition on the textbook market, in the light of the frequent changes in the relevant legal framework, as well as certain specificities of this market, which allow schools to opt for textbooks from certain publishing houses in an insufficiently transparent manner.

In the analysis, special attention was paid to the process of issuing and selling textbooks and textbook sets for primary education, as well as the conditions under which textbooks were sold on the market of the Republic of Serbia in the observed three-year period. The research included the analysis of the market structure and market shares of textbook publishers, the analysis of (contractual) relations between textbook publishers on the one hand and their customers, distributors, bookstores and schools, as well as the effects these relations can have on the state of competition on the market. The subject analysis includes the method of forming the price of textbooks, as well as the analysis of the structure of the textbook sales price.

For the purposes of the analysis, the data on 16 publishers of textbooks for primary education and their 10 largest customers, distributors, who further sell the textbooks to schools and bookstores, were collected and processed.

The Commission would like to thank all market participants who duly submitted the requested data in the course of the sector analysis.

Report on the Sectoral Analysis of the State of Competition in the Distribution Channels of Ceramic Tiles and Sanitary Ware 2018 – 2020.

kzkPursuant to Article 47 of the Law on Protection of Competition, the Commission conducted a sectoral analysis of the state of competition in the distribution channels of ceramic tiles and sanitary ware.

A comprehensive analysis of the distribution channels of ceramic tiles and sanitary ware was conducted, in the market of the Republic of Serbia for the period from 2018 until 2020. This also implied determining the relationship between competitors – manufacturers, importers, wholesalers and retailers in the market of ceramic tiles and sanitary ware, assessing their market share and relative strength, analysis of contractual relationships, and the effects that these relationships may have on competition. The focus of the analysis was on the wholesale market of ceramic tiles and sanitary ware, while the market for the production of ceramic tiles and sanitary ware and the retail market of ceramic tiles and sanitary ware were processed in certain segments, solely in order to fully understand the distribution chain of the subject products.

An extensive network of trade in the said products was observed, wholesalers and retailers cooperating with a large number of suppliers, almost all of which are profiled as multi-brand stores with a wide range of different manufacturers, distributors and suppliers. Apart from the afore said, the analysis of the contract indicates that there are certain phenomena that may be potentially controversial from the aspect of competition protection, and the Commission will therefore continue monitoring the behavior of market participants and circumstances that indicate to violations of the Law on Competition.

The Commission would like to thank all market participants who provided the requested information in the course of the analysis.

Market Study of Intercity Bus Transport

kzkThe sectoral analysis of the intercity bus transport market in the Republic of Serbia was conducted in cooperation with the representatives of the World Bank within IFC’s Serbia Invest Climate Program. The project of improving the business environment in the Republic of Serbia, which is implemented on the basis of the Agreement between the Government of the Republic of Serbia and the International Finance Corporation, envisages that the World Bank will provide technical assistance to the Commission for Protection of Competition for the improvement of competition and market regulation in the Republic of Serbia, through several activities. One of the planned activities is the provision of technical assistance for conducting market research, including markets in which public companies participate, in order to identify and overcome obstacles in the implementation of fundamental market reforms that could affect the performance of the sector.

The subject analysis was prepared by the World Bank team, for the project purposes.

The subject of the analysis is the bus transport market in terms of identifying the basic characteristics of the market and market structure as well as the analysis of the regulatory environment, market performance and analysis of competition in the market through the identification of practices and rules that may distort competition. The analysis concluded that the existing regulatory framework contributes to suboptimal market outcomes and made recommendations for improving the intercity road transport market.

The Commission would like to thank all market participants who provided the requested information in the course of the analysis.

Report on the Sector Inquiry into Competitive Conditions on the Tour Operators Market, 2017-2019

kzkUnder Article 47 of the Law on Protection of Competition, the Commission launched a sector inquiry into competitive conditions on the tour operators market.

The subject of the sector inquiry was the establishment of relations between competitors on the market concerned, tour operators, including the estimate of their market share and relative power, in addition to the analysis of (contractual) relations between tour operators and travel guarantee providers.

The main purpose of the sector inquiry was the identification of weaknesses in the market structure and potential issues in terms of intensifying competition, restriction or any other form of disruption or prevention of competition affecting the undertakings.

The market analysis was conducted based on the information obtained, in particular concerning the provision of travel guarantees necessary for the issuance of travel licenses under the Law on Tourism.

The Commission wishes to express its gratitude to all undertakings providing information during the inquiry drafting process.

Sector Inquiry into Sugar Beet Production and Buy Out, Sugar Production and Wholesale Trade from 2017-2019

kzkPursuant to Article 47 of the Law on Protection of Competition and the Decision of the CPC Council, the Commission launched a sector inquiry into competitive conditions on the markets for sugar beet production and buy out, sugar production from sugar beet processing, and sugar wholesale trade.

The subject of this research was to establish relations between competitors on the markets concerned from 2017-2019, assess their market share and relative power, analyze regulatory framework and look into the (contractual) relations between sugar beet producers, sugar beet purchasers, sugar producers, and wholesale traders of sugar products.

The Report on the inquiry into these particular markets summarizes the conclusions made in reference to the markets concerned, provides an overview of the dynamics between basic parameters of the markets concerned, offers comparisons with the EU market, particularly considering the changes that have happened during the observed period, gives an analysis of contractual relations, rebate policy, and compares the selling prices on the domestic market and export prices. Considering the tendencies on the sugar market and reduction in the number of operating sugar refineries both on the national and European markets, it is established that the export potential of this industrial sector to the neighboring countries is a very important factor, and that is necessary to maintain the production capacities and prevent the trend of closing and decline in the number of operating sugar refineries in the Republic of Serbia.

The Commission wishes to express its gratitude to all undertakings for providing the requested information during the Report drafting process and invites all stakeholders and other experts to present their respective commentaries to the Report by sending their observations to the email address office.kzk@kzk.gov.rs, Subject line: Commentary to the Sector Inquiry into the Markets for Sugar Beet and Sugar in the Republic of Serbia.

Commission Conducts Sector Inquiry into Competitive Conditions on the Wholesale Market for Synthetic Fertilizer

kzkIn accordance with Article 47 of the Law on Protection of Competition, the Commission for Protection of Competition has conducted a sector inquiry into competitive conditions on the wholesale market for synthetic (mineral) fertilizers.

The Commission has noted the need to analyze the competitive conditions on the fertilizers market given the increase in the producer price of fertilizers in the first three quarters of 2019, as well as the bankruptcy of one of the largest manufacturers of synthetic fertilizers in the Republic of Serbia – company “HIP Azotara” from Pančevo.

The research is carried out to provide a comprehensive overview of the structure and dynamics of this market and competitive conditions prevailing therein, as well as to identify potential market weaknesses.

In this inquiry, the Commission started off from the wholesale market for synthetic (mineral) fertilizers as a whole, within which it has analyzed the market for nitrogen fertilizers and the market for compound fertilizers.

For the purposes of this analysis, the Commission has collected and processed the data of the Statistical Office of the Republic of Serbia and the Ministry of Finance – Customs Administration, as well as other publicly available data and information relating to the production, import, export, and wholesale of synthetic fertilizers. The sector inquiry also looked into eight undertakings, manufacturers, and importers whose combined share accounted for about 90% of the total estimated fertilizers market in 2019.

The Commission wishes to express its gratitude to all undertakings for providing the requested information throughout the drafting process, and invites all interested parties and other experts to present their respective commentaries to the report by sending their observations to the email address office.kzk@kzk.gov.rs, Subject line: Commentary to the sector inquiry into fertilizers market, no later than January 15, 2021.

Sector Inquiry into the Rail Freight Transport Market in the Republic of Serbia

kzkThe Sector Inquiry into the Rail Freight Transport Market in the Republic of Serbia is done in cooperation with the WB Group representatives under the Serbia Investment Climate Program. Under the Program, the Government of the Republic of Serbia and the International Finance Cooperation have signed the Agreement on Cooperation envisaging, inter alia, the provision of technical support by the WBG to the Commission for Protection of Competition to boost competition and regulate markets in the Republic Serbia. The selection and prioritization of sectors are carried out based on the WBG Markets and Competition Policy Assessment Tool (MCPAT). For the purposes of this project, the inquiry was conducted by the Compass Lexecon and Karanović & Partners Consortium.

The subject of the inquiry is the market for cargo transportation by railway, providing an in-depth analysis of the competition environment of this market along the value/supply chain, market structure and dynamics, regulatory environment and market performances, in addition to identifying practices and rules that can distort the level playing field and facilitate non-competitive market outcomes.

The inquiry found no material elements that would indicate an infringement of the competition rules. Instead, the main reasons for insufficient market development established in the Report are as follows: low quality of rail infrastructure, outdated train path allocation procedures, and the lack of intermodal transport terminals, constituting substantial barriers to entry and business growth. Despite the deficiencies noted, it is established that the cargo transportation market in the Republic of Serbia is still in the early stages of development since it is open to competition only since 2016. As one of the reasons for such suboptimal situation, the authors also state the domestic price regulation policy in force, noting that the fixed tariffs for national transportation services as provided by the Government of the Republic of Serbia hinder price competitiveness.

The Commission hereby wishes to express its gratitude to all undertakings providing requested information during the inquiry and invites all persons and other experts to provide their commentaries to the Report no later than September 10, 2020, to the email address office.kzk@kzk.gov.rs, with annotation: Commentary to the Sector Inquiry into the Rail Freight

Report on the Sector Inquiry into Retail Market in the Period 2017-2018

kzkThe Commission for Protection of Competition conducted a sector inquiry into the retail sale in non-specialized stores with food, beverages and tobacco predominating, covering a two-year period (2017-2018). The objective of the inquiry was to establish relations between market competitors in the retail sale in non-specialized stores with food, beverages and tobacco predominating in the territory of the Republic of Serbia, in terms of assessing their market share and relative power, as well as to analyze relations between suppliers and selected trade chains with respect to individual product categories.

The recommendations provided by the Commission constitute an integral part of the report, in which the Commission expressed a need for a public trade register that would considerably facilitate the monitoring of this trade segment in the coming period, while also reiterating the importance of cooperation with other government authorities in terms of submitting all relevant legislation and regulations for the provision of legal opinions.

The Commission wishes to express its gratitude to all undertakings for their timely and proper submission of requested data during the inquiry drafting process, and concomitantly invites all undertakings and other members of the expert public to submit their commentaries to the report, as well as to give proposals and suggestions for the follow-up reports, no later than February 28, 2020, to the email address: office.kzk@kzk.gov.rs, with the subject line: Comments to the sector inquiry into retail market.

Inquiry into Competitive Conditions in the Sunflower Production and Sales Market in the Territory of the Republic of Serbia for the period 2016-2018

kzkPursuant to the provisions of Article 21(1/6) of the Law on Protection of Competition, the Commission for Protection of Competition conducted an inquiry into competitive conditions in the sunflower production and sales market in the territory of the Republic of Serbia for the period 2016-2018.

The purpose of the inquiry was to gain an understanding of the sunflower production and sales market, from a market structure perspective and by observing the market shares of individual market participants, as well as to analyze the trends in sunflower purchase prices during the period observed. The inquiry covered the data on production, purchase, import, and export of sunflower seeds, as well as on the export and import of raw and refined sunflower oil during the period observed.

The inquiry used data provided by the Ministry of Finance – Customs Administration on the import and export of sunflower and sunflower oil, in addition to publicly available information provided by the Statistical Office of the Republic of Serbia on the sunflower and sunflower oil production, as well as information provided by undertakings – sunflower buyers and producers, namely: Dijamant AD from Zrenjanin, Vital AD from Vrbas, Sunce AD from Sombor, Banat AD from Nova Crnja, Victoriaoil AD from Šid, Bimal Trading doo from Belgrade, and Bimal Agri doo from Bečej.

The Commission wishes to express its gratitude to all undertakings for their timely and proper submission of requested data during the inquiry drafting process, and concomitantly invites all undertakings and other members of the expert public to submit their commentaries to the report, to the email address: office.kzk@kzk.gov.rs, with the subject line: Comments to the inquiry into sunflower market.

Noting the importance of this crop for the development of food industry and the overall industrial development, as well as the conclusions of this inquiry, the Commission will put particular emphasis on due-diligence measures in the future in order to monitor the behavior of undertakings and identify particular circumstances prevailing in this market which might indicate any violation of the Law on Protection of Competition.