Major Czech brewery hit with record fine for exceeding payment deadline limits. Are your supply chain contracts compliant?

The Czech Office for the Protection of Competition ("Office") delivered a fine of CZK 6 mil. (approx. EUR 245 000) to Pivovary Staropramen s.r.o. ("Staropramen"), a major brewery, for concluding agreements with prohibited payment deadlines with their suppliers. The fine is the largest imposed to date under the Act on significant market power ("ZVTS", no. 395/2009 Sb.). As recent amendments have significantly expanded the scope of the ZVTS, the case highlights the need to revise existing contracts to ensure they're compliant.

Regulatory Expansion in Food and Agriculture Sector

As we have previously reported, the Czech Republic implemented EU Directive 2019/633 by amending the ZVTS, effective from 1 January 2023. This legislative change increased the number of regulated entities from approximately 10–20 businesses to potentially thousands of companies with annual turnover of EUR 2 million or more. The amendment also introduced stricter obligations, and expanded the list of prohibited unfair practices. For example, contracts between customers with significant market power and their suppliers must not have payment deadlines exceeding 30 days from receipt of invoice. 

Following the amendment, the Office conducted comprehensive sector investigations (see our report here) across 21 submarkets in the food and agricultural sector, examining approximately 500 entities and over 4 000 supplier contracts. These investigations revealed widespread non-compliance, particularly regarding payment deadline requirements. The Office subsequently initiated numerous administrative sanction proceedings.

Breaches of payment deadline limit met with record fine

Staropramen is one of the largest Czech breweries and part of the multinational brewing group Molson Coors Beverage Company. The Office has now imposed a record fine on Staropramen for violating the ZVTS by agreeing to payment deadlines exceeding the statutory 30-day limit with four of its raw material suppliers. Between 2023 and 2024, Staropramen was found to have committed 60 separate violations, with some invoices remaining unpaid for up to 215 days.

During the proceedings, Staropramen admitted to the violations and took part in a settlement procedure, which resulted in the fine being  reduced from the original CZK 7.5 million (approx. EUR 308,000). Nevertheless, the fine of CZK 6 million (approx. EUR 245,000) is still the largest ever delivered for breaches of the ZVTS. Deputy Chairman of the Office, Petr Solský, added: "This case demonstrates that the Act on significant market power does not apply only to retail chains, but also to numerous other companies with significant market power who must comply with it."

High time for contract review?

The case highlights both the Office’s willingness to enforce ZVTS obligations, and demonstrates the regulation's wide scope. As the ZVTS obligations now apply to a wide range of food and agricultural companies, and the Office’s sector investigation identified mass-scale non-compliance, it is highly recommended that companies review their existing supplier contracts and ensure compliance. Failure to do so could result in substantial penalties, as evidenced by the Staropramen case, which is unlikely to be the last.

The Office’s press release can be found here (in Czech only).

Special thanks to Dominik Očko for his contribution to this article.

If you need more information or further guidance in this area, please contact Vojtěch Chloupek, Martin Taimr and Dominik Očko. 

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