Royal Netherlands Navy stops unfair competition with wholesalers

The Marcandi Foundation (in Dutch: Stichting Marcandi), which was founded by the Royal Netherlands Navy and is located in the Dutch city of Den Helder, has stopped selling food and non-food items to various buyers outside the Dutch Ministry of Defense. Marcandi came to his decision following discussions between the Royal Navy and the Netherlands Authority for Consumers and Markets (ACM). As a result of that decision, unfair competition with commercial wholesalers has been stopped.

Marcandi is responsible for the procurement of products such as beverages, tobacco products, cafeteria food, and personal hygiene products, mostly for divisions of the Royal Navy. However, Marcandi not only sold these items to organizations belonging to the Ministry of Defense, but also to associations and individuals outside the Ministry. In principle, that is allowed. In this case however, Marcandi had a cost advantage vis-à-vis other wholesalers as the director of Marcandi is paid by the Navy, not by Marcandi itself. As a result thereof, Marcandi competed unfairly with other commercial wholesalers. And that is not allowed according to the Dutch law on competitive neutrality, the Dutch Act on Government and Free Markets.

ACM had discussed this issue with the Ministry of Defense. Marcandi subsequently stopped selling products to organizations and individuals outside the Ministry, and, from now on, will only be supplying its products to the Ministry of Defense.

The Dutch Act on Government and Free Markets

Government organizations are allowed to offer products and services on the market. If they do, they will have to play by the rules though. Those rules are to protect commercial businesses against unfair competition by government organizations. For example, the Dutch Act on Government and Free Markets prohibits governments (the central government and local ones) to give preferential treatment to its own companies above their commercial competitors.