Pingo Doce owner Jeronimo Martins has warned about impact on negotiations with suppliers

Pingo Doce owner Jeronimo Martins has warned about impact on negotiations with suppliers

Portugal's retailers have warned a controversial new law restricting supermarket discounts will harm consumers, food suppliers and retailers.

The president of the Association of Portuguese Distributors (APED) has said the "negative impacts" of the law would cause price rises.

Ana Isabel Trigo Morais warned its text was "confusing" and would be "impossible to apply". As a result, it "will be highly damaging to the existing relations between suppliers and retailers".

The legislation, which came into force on Tuesday (25 February), tries to define illegal loss leaders in relation to the price paid by retailers, taking into account promises of future discounts. Rule-breaking retailers will pay fines ranging from EUR50,000 to EUR2.5 million depending on their size.

Pedro Soares dos Santos, president of Portuguese retail giant Jerónimo Martins, claimed the law would make it harder for retailers to strike contracts with suppliers, given the fluctuations of purchase process and the need to maintain retail price points.

However, he added: "Nobody quite knows what the real implications of this will be."

Consumer rights groups were not formally consulted during the drafting of the new law.