On January 28, 2021, the Resolution N° 110/2021 issued by the Secretariat of Domestic Trade was published in the Official Gazette. Said Resolution is related to the so-called Supermarket’s Gondola Act 27,545 (The Act is aimed at the regulation of the grocery retail market, the promotion of competition and at making promotion space on Gondolas more equal, trying to combat unjustified rise of food prices. With said Act consumers may have access to regional or handcrafted products of micro, small and medium enterprises, family agriculture, handcrafted products, peasant and indigenous agriculture products).
It is worth mentioning that the Secretariat of Domestic Trade (“SDT”) was appointed as the Enforcement Authority of said Act by the regulatory decree of the regulation, N° 991/2020, and said Authority is empowered to issue the necessary supplementary and clarifying regulations for the better implementation of the Act.
Within this framework, the whereas clauses of Resolution 110/2021 are referred – as regards this analysis – only to the competence assigned to the SDT to define the products and categories of products reached by Act 27,545 and the conditions of the display of the products that are sold under the price-watch program called “Precios Cuidados” to encourage consumption.
Notwithstanding the foregoing and without attempting to give to the provision a proper regulatory framework that justifies it, section 1st of Resolution 110/2021 deals with an issue other than those that are the subject matter of the whereas clauses.
And it modifies the list of “parties reached by the Act” defined by section 3rd of the Supermarket Gondolas Act that, as regards what concerns us here, provides that “The establishments defined by section 1st of Act 18,425 are obligated to comply with this Act”[1]
In such sense, within the establishments listed in section 1st of Act 18,425 we find the so-called “Self-service food stores” and “Self-service non-food stores”, in both cases, with retail premises of not more than one hundred and forty square meters (140 m2).
Also, the establishments listed in said section 1st of Act 18,345 include the “Retail Chain Stores”, composed by a minimum number of five (5) stores, that add –without taking into account the individual surface of each premises -, at least a showroom of three thousand square meters (3.000 m2).
Under certain circumstances both, the “Self-service food stores” and the “Self-service non-food stores” and likewise the “Retail Chain Stores” were obligated to comply with the Supermarkets’ Gondolas Act, as set forth in its section 3rd.
But section 1st of Resolution 110/2021[2] seems to exempt from these legal regulation at least part of them, when it provides that “… the parties reached by Section 3rd of Act N° 27,545 on Supermarkets’ Gondolas, that own on-site sales showrooms with a commercialization surface area equal or bigger than EIGHT HUNDRED (800 m2) square meters, for the products included in Section 3rd of this resolution[3], are obligated to comply with the provisions of said Act …”
For the purposes of section 1st of Resolution 110/2021, as evidenced from its text:
“The on-site sales space of the products included in Section 3rd of this resolution shall be considered the commercialization surface area, included from the checkout line for the display in gondolas, display stands, display shelves next to the checkout lines and exclusive freezers, as well as the space for the circulation and access of consumers. The spaces for the exclusive use of the establishment’s personnel, warehouses of goods, gondolas and display stands that contain products not included in Section 3rd hereof and every space forbidden to the access of consumers are exempted from the commercialization surface area.”
Ergo, a reasonable interpretation of this resolution – but not the only one possible – is that the “parties reached by the Act” that own retail sales showrooms with a surface smaller than eight hundred square meters (800 m2), for the commercialization of dairy products and refrigerated food (except meats, other butcher products, fish and seafood), frozen food, fruits and vegetables, grocery items (except their own manufactured products without trademark), non-alcoholic beverages, alcoholic beverages, perfumery, cleaning products and pets’ food and accessories), even if they fit into the definition of “parties reached by the Act”, are not obligated to comply with the provisions of the Supermarkets’ Gondolas Act.
In the light of the foregoing, the extent of the exemption must be still unraveled.
A possible interpretation, although not literal, is to understand – without further ado – that if the showroom of a store has a surface area of less than eight hundred square meters (800 m2) the provisions of the Supermarkets’ Gondolas Act should not be complied with by said store, without bearing in mind any other circumstance.
If such was the intention of the SDT it would have been more precise – and clear – that the first sentence of section 1st of Resolution 110/2021 would mention not the “parties reached by the Act”, but the commercial premises.
For example, through the following text:
“… The commercial premises which on-site sales showrooms have a retail surface area smaller than eight hundred square meters (800 m2), for the products included in Section 3rd of this resolution, are not obligated to the compliance with the provisions contained in said Act.”
But, the way in which the regulation was drafted, the exception is – let’s say – unquestionable only in cases of “parties reached by the Act” that have one or more “Self-Service Food Stores” or “Self-Service Non-Food Stores” which sales showrooms do not reach, together, eight hundred square meters (800 m2).
Due to the mistaken wording of the first sentence of Section 1st of Resolution 110/2021 – that is referred to the “parties reached by the Act” using plural, “sales showrooms” – and in view of the absence of whereas clauses helping to interpret their meaning, it is not so clear that – as stated by journalistic publications:
(i) The exemption reaches “Self-Service Food Stores” and “Self-Service Non-Food Stores” of the same owner which sales showrooms reach, together, eight hundred square meters (800 m2), although when considered individually they have a smaller surface; and
(ii) Reaches “Retail Chain Stores” – which, by definition, in order to be such, must have at least three thousand square meters (3.000 m2) of sales showrooms – even when none of the rooms of the stores that make them up reaches eight hundred square meters (800 m2).
I understand that a clarifying resolution, to clear said doubts, would be useful to avoid misunderstandings and eventual conflicts.
[1] With the exception of the “economic agents whose invoicing is equivalent to the micro, small or medium enterprises …”
[2] SECTION 1ST.- The parties reached by Section 3rd of Act N° 27,545 of the Supermarkets’ Gondolas, that own retail sales showrooms with a commercialization surface area equal or bigger than EIGHT HUNDRED square meters (800 m2), for the products included in Section 3rd of this resolution, are obligated to comply with the provisions of said Act. The on-site sales space of the products included in Section 3rd of this resolution shall be considered the commercialization surface area, included from the checkout line for the display in gondolas, display stands, display shelves next to the checkout lines and exclusive freezers, as well as the space for the circulation and access of consumers. The spaces for the exclusive use of the establishment’s personnel, warehouses of goods, gondolas and display stands that contain products not included in Section 3rd hereof and every space forbidden to the access of consumers are exempted from the commercialization surface.
[3] Dairy products and refrigerated products (except meat, other butcher products, fish and seafood), frozen food, fruits and vegetables, grocery items (except their own manufactured products without trademark), non-alcoholic beverages, alcoholic beverages, perfumery, cleaning products and pets’ food and accessories.