EXCEPTIONAL PERMISSIONS GRANTED BY THE FINNISH COMPETITION AUTHORITY TO THE FIXED PRICING SYSTEM OF THE K-RAUTA, RAUTIA AND K-AGRICULTURE CHAINS

The Finnish Competition Authority has granted to Rautakesko Ltd and Kesko Agro Ltd exceptional permissions by which they are allowed, on certain conditions, to fix the highest retail prices for part of the products sold by the K-rauta, Rautia and K-agriculture chains. Rautakesko Ltd and Kesko Agro Ltd are Kesko Corporation’s wholly owned subsidiaries. Earlier this year, the Finnish Competition Authority has granted exceptional permissions to Kesko Food Ltd’s and Keswell Ltd’s chains.

The exceptional permissions received by Rautakesko Ltd and Kesko Agro Ltd include the following conditions:

1. The highest retail prices can be fixed for products included in the chain selections of the above chains, and those products cannot account for more than 35 percent of the average annual sales of each chain’s stores in each size class.
2. Retailers can always use prices that are lower than the highest retail prices fixed by Rautakesko Ltd and Kesko Agro Ltd, and they can advertise products independently.
3. The highest retail prices can be valid in the K-rauta and Rautia chains for a maximum of five (5) months and in the K-agriculture chain for a maximum of four (4) months at a time.
4. The size classes of stores shall be determined in the way that all stores have an opportunity to purchase at least 20 percent of their total sales such products that are not included in the chain selection.
5. The stores operating in the chains can also purchase, without restrictions placed by Rautakesko Ltd or Kesko Agro Ltd, products included in the fixed pricing system from other suppliers than Rautakesko Ltd and Kesko Agro Ltd or suppliers determined by them.

According to the fourth item, the chain selection can account for 80 percent of the sales of the chain’s stores. The exceptional permissions are valid for 1 January 2001 to 31 December 2005.

According to Kesko, the exceptional permissions granted by the Finnish Competition Authority give Kesko and the K-stores good opportunities to carry out operations in line with the new chain operational model. Applications for exceptional permissions have now been handled for all of the K-Alliance’s chains.

For further information, please contact Rautakesko Ltd’s and Kesko Agro Ltd’s President Matti Halmesmäki, tel. +358 1053 20810.

KESKO CORPORATION
Corporate Communications

Erkki Heikkinen
Senior Vice President

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