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Turkey’s official anti-trust watchdog expects to impose a new raft of fines on some of the country’s top retailers and wholesalers after an investigation found they were colluding to drive up prices. 

Turkey’s Competition Agency said major chain stores and 15 suppliers had formed a “hub and spoke” price-fixing cartel. It will complete its probe in the fall. The warning comes after five of Turkey’s biggest chain stores and an olive oil supplier were fined 2.6 billion liras ($155 million) following an earlier investigation that concluded last year.

“Not all the price hikes are the result of costs, demand or rising commodity prices on global markets. If that difference in prices is caused by a lack of competition, that is our responsibility,” Birol Kule, head of Turkey’s Competition Agency, said in an interview. “I can’t sleep when I think about our role in inflation.” 

Those companies have appealed the fines in court. Executives say they have to raise prices to replenish stock because a global surge in inflation and a weak lira are driving up the cost of merchandise. They blame the government’s economic and monetary policies for the cost-of-living crisis unfolding in Turkey, where consumers are grappling with inflation above 70%. 

More Inspections

The Competition Agency is an official entity that works with the trade ministry. Its board consists of high court judges, officials from the trade and industry ministries, the government’s planning department and representatives of the chambers of commerce and the stock exchange. 

It has the authority to fine or even intervene in the business models of companies if they form cartels or abuse a dominant market position. Companies can appeal its decisions in court.

The Competition Agency has stepped up its inspections as President Recep Tayyip Erdogan resists pressure to tighten monetary policy, blaming runaway price rises on hoarding and collusion by retailers and middlemen.

It plans to double its capacity in the next two years, hiring about 200 to 250 people and was making new technology investments to enable it to monitor market changes more closely. 

“In a market where players can fairly compete with each other,” Kule said, “there would be no excessive prices.”

The agency has also sent its findings on competition in digital sectors to parliament, which is considering new legislation. 

“The current legislation doesn’t give us enough tools to facilitate effective competition in digital markets,” he said.

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