Tackling unfair trading practices in the agricultural and food supply chain
The EU will soon have more effective tools to tackle unfair trading practices (UTPs) in the agri-food chain, and to prevent the weaker bargaining position of small and medium-sized farmers from being exploited by larger operators, such as major processors & retailers.
The Council has adopted a directive on unfair trading practices in business-to-business relationships in the agricultural and food supply chain. The directive will ban the most obvious unfair trading practices and provide member states with more effective ways of tackling abuses.
The new rules will cover micro enterprises, small and medium-sized enterprises (SMEs) and mid-range enterprises that have an annual turnover lower than EUR 350 million. In order to do that, the directive adopts a dynamic approach, according to which smaller operators are only protected against unfair trading practices in cases where these originate from larger businesses. This means for instance that micro enterprises will be protected against SME buyers and small and medium-sized suppliers will be protected against mid-range buyers and buyers larger than that.
The objective is threefold: to protect only those who really need it, to safeguard the smallest suppliers, but also to prevent that costs caused by abuses of medium-sized operators are being passed on to primary producers.
Unfair trading practices such as late payments for perishable products, last minute order cancellations, unilateral or retroactive changes to supply agreements, the misuse of confidential information, and the retaliation or threat of retaliation against the supplier will be completely banned, while other practices will only be permitted if they are provided for in a clear and unambiguous previous agreement between the parties. Examples are: a buyer returning unsold food products to a supplier, a supplier paying for the promotion or the marketing of food products sold by the buyer, and costs for stocking, displaying or listing agri-food products.
Member states will have twenty-four months after the entry into force of the directive to transpose it into national law, and six more months to apply its provisions.
An "Agricultural Markets Task Force" was set up by the Commission in 2015 with the aim of improving the situation of farmers in the food chain, and delivered its report in mid-November 2016. One of its recommendations for tackling UTPs was to establish a baseline regulatory framework at EU level.
Following the Task Force report, the Council adopted conclusions in December 2016 on strengthening the position of the farmers in the food supply chain and tackling UTPs, calling on the Commission to "undertake, in a timely manner, an impact assessment with a view to proposing an EU legislative framework or other non-legislative measures to address UTPs".
Following the Commission proposal for a directive in April 2018, the Council agreed its negotiating position on 1 October, and reached an agreement with the European Parliament on 19 December.
Currently a majority of member states already has in place specific national rules protecting suppliers against UTPs.
- Directive on unfair trading practices in business-to-business relationships in the agricultural and food supply chain
- Fairer role for farmers in the food supply chain (policy page)
- Fairer contractual relations in the agri-food chain agreed (press release, 19/12/2018)
- Better protection for farmers against unfair trading practices: Council agrees its negotiating position (press release, 01/10/2018)
Maria Daniela Lenzu
+32 2 281 21 46
+32 470 88 04 02
Latest News from
Stronger EU borders with a new standing corps of 10,000 border guards18/04/2019 15:25:00
TheEuropean Parliament hasadopted the ECs proposal to reinforce the European Border and Coast Guard Agency with a standing corps of 10,000 border guards by 2027.
European Parliament's vote on new rules to improve fairness & transparency of online platforms18/04/2019 13:37:00
The European Parliament has approved the new Regulation on platform-to-business trading practices that is aimed at establishing a fair, trusted and innovation-driven environment for businesses and traders when using online platforms.
WTO Boeing dispute: EU issues preliminary list of U.S. products considered for countermeasures18/04/2019 12:25:00
The EC has launched a public consultation on a preliminary list of products from the USA on which the EU may take countermeasures in the context of the ongoing Boeing dispute at the World Trade Organisation (WTO).
Registered substances mapped for regulatory action18/04/2019 09:25:00
The first report of the Integrated Regulatory Strategy presents a mapping of the universe of registered substances that are on the EU market. This information helps authorities to identify, plan and monitor the progress on identifying and regulating substances of concern.
The United States is Europe's main soya beans supplier with imports up by 121%17/04/2019 16:25:00
New figures released by the EC, show that imports of U.S. soya beans by the EU increased by 121% over the current market year (July 2018 to mid-April 2019), compared to the same period in the previous year.
EC updates the EU Air Safety List to maintain highest level of protection for passengers17/04/2019 15:37:00
The EC has updated the EU Air Safety List, the list of airlines that do not meet international safety standards, and are therefore subject to an operating ban or operational restrictions within the EU.
EC launches debate on more efficient decision-making in EU social policy17/04/2019 13:25:00
In his 2018 State of the Union speech, President Juncker announced a comprehensive review of all passerelle clauses provided for by the EU Treaties. As a result, three Communications have already been adopted: on common foreign and security policy (September 2018), on taxation (January 2019) and on energy and climate (April 2019). The Communication on the passerelle clauses in social policy is the fourth one.
EC welcomes adoption of new measures denying terrorists & criminals the means and space to act17/04/2019 12:37:00
The European Parliament has adopted 2 important Security Union legislative initiatives proposed by the EC on interoperability and explosive precursors.
ESMA publishes translations for Guidelines on CCP APC Margin Measures17/04/2019 09:25:00
The European Securities and Markets Authority (ESMA) recently (15 April 2019) issued the official translations of its Guidelines on EMIR Anti-Procyclicality Margin Measures for Central Counterparties.