'Sparring' with Spar Polska
Spar in Poland is a medium-sized network of 250 stores/supermarkets, located mainly in southern and western Poland. They all operate on a franchise basis. Spar International is a huge player who has built one of the largest franchise networks in the world. The Dutch company underlines that under the Spar logo there are more than 13,000 stores in 45 countries. Poland is one of them.
Spar Polska, belonging to the Bać-Pol Group managed by Mr. Leszek Bać, since the year 2010 has had an agreement with the Dutch mother company, Spar International. In February this year Spar International decided to break the contract with Spar Polska, in fact with the Bać-Pol Group, and look for a new licensee in Poland. The reasons were not officially announced. The Bać-Pol Group, which apart from managing the Polish Spar, is primarily a large wholesaler of goods, fell into financial trouble.
South African company Spar Group Ltd
The attempt to consolidate Polish trade by the Bać-Pol Group failed, the wholesale segment declined, so to save the situation, Bać-Pol started selling assets. They got rid of Stokrotka chain of shops but decided to keep Spar shops. The Bać-Pol Group has been protected from creditors and looking for an investor to get out straight but the Dutch Spar International lost patience and tried to change the partner for a more wealthy. They did not have problems with it, this opportunity was taken by the South African company Spar Group Ltd, which is a large-sized company that has gone beyond its national market, investing in other African countries, but also in Ireland and Switzerland. The annual revenue of Spar Group Ltd. is over PLN 25 billion, and the company has been interested in the Polish market for several years, negotiated even with the Bać-Pol Group in the past.
When in May it turned out that Spar International chose Spar Group from South Africa for a new partner, Bać-Pol Group began the counterattack. The last weeks are the legal battle between Bać-Pol on the one hand and the combined Dutch-South African forces on the other. The war takes place in courts in both Poland and the Netherlands.
So far, three Polish courts, in Warsaw, Łódź and Rzeszów, dismissed the lawsuits, but two others, in Katowice and Kielce, issued a ruling favorable for the Bać-Pol Group. According to them, Spar Polska still has the rights to the Spar brand on the Polish market, and the Spar Group cannot contact the franchisees running the Spar stores and persuade them to terminate their existing contracts. However, the most important fight will be fought in court not in Poland, but in the Netherlands, according to the franchise agreement. This court will have to assess whether Spar International could terminate cooperation agreement with the Spar Polska in short time. The Dutch argue that yes, and Spar Polska is of course of a different opinion, confirming the agreement can be terminated but with a long, several-year notice period. The new investor does not have such a patience, Spar Group Ltd wants to start building their Polish chain immediately. The Polish chain is to consist not only of the current Spar network, but also of the Piotr i Paweł chain, which it recently acquired from the Spar Group investment fund. Today, 70 stores operate under the name Piotr i Paweł. The judicial fight for the rights to the Spar brand in Poland may take months or even years. Spar Group is rich, has time and money. Spar Polska (Leszek Bać) does not so he is looking for an investor. It is speculated that he is talking with the giant of the Polish market, Eurocash, which has many wholesale stores and runs its own franchise networks, such as: Delikatesy Centrum, ABC or Groszek. The owners of 250 stores operating today under the Spar logo are in the worst situation. They do not know what to do. On the one hand, representatives of Spar Polska assure them that all contracts are valid, and the judgments of Polish courts confirm this, they threaten the consequences if the franchisee terminates the contract and wants to tie up with the South African rival. Spar Group Ltd. has a formal ban on contacts with Spar stores, but the franchisee still come to them, especially that they tempt new partners with special bonuses. Leaving Spar Polska is not simple and many shops are afraid of expensive processes, so for now they are waiting for further developments.
On the Polish market, takeovers and changes of partners are almost routine, but usually everything takes place peacefully. The Polish market, especially for medium-sized players such as Spar, is very difficult, because it is dominated by discounters, with Biedronka and Lidl as the leaders, they set trends, invest huge amounts of money in advertising and dictate prices. The other players, if they want to survive, have to adapt. Supermarkets such as Spar are looking for a niche for themselves, focusing on more fresh products, counters with cold meats and cheeses, and a strong position in selected regions. Spar franchisees are hoping that South African money will help them fight against the competition but changing a partner does not mean that they will gain more freedom. The Spar Group is aiming high, will combine Spar and Piotr i Paweł stores, building a large, nationwide network as only such a project makes sense, a South African group enters Poland not to have 200 or 300 stores, but to become one of the main players. It is possible that there are further acquisitions in their plans, and there are plenty of candidates, especially Polish owners of smaller food chains would like to sell them and withdraw from this very difficult part of the market.