Finnish retailer Kesko confirmed it has received a provisional proposal from competition authorities concerning its role in the maximum pricing of groceries in 1997-2000 in the horizontal K-market and K-neighbourhood store chains and in 1999-2000 in the K-extra chain belonging to the K-Grocers' Club.

In its draft, the Finnish Competition Authority presents that at least in 1997-2000 the organs consisting of K-market and K-neighbourhood store chain retailers and in 1999-2000 the organs consisting of K-extra chain retailers fixed maximum prices for other grocery trade products in addition to those covered by the exemptions valid at the time.

Until the end of 2000, the K-Alliance's operations were based on mutual horizontal cooperation of retailers. From the beginning of 2001, food store chains adopted a vertically managed system between Kesko Corporation's subsidiary Kesko Food Ltd and the retailers, Kesko stated in a release.

Since 2001, Kesko Food has had exemptions granted by the Finnish Competition Authority for the maximum pricing of groceries. According to the exemption valid at the moment and granted by the Finnish Competition Authority on 16 April 2004, Kesko Food can decide the highest retail prices for Pirkka products and some other products sold at K-food store chains, the release continued. The stock exchange release concerning the exemption was published on 16 April 2004.

Kesko said it will give its answer to the proposal draft to the Finnish Competition Authority.