European Commission to ban unfair trade practices in the food supply chain

April 13 , 2018

The European Commission has proposed to ban the certain trading practices in the food supply chain to ensure fairer treatment for small and medium-sized food and farming businesses.

It says the smaller operators in the food chain, such as farmers, are vulnerable to unfair trading practices and often lack bargaining power and alternatives to supply their consumers.

“With this proposal, the Commission is tackling the unfair trading practices head-on. We act because unfair business conduct undermines the economic viability of operators in the chain,” said Jyrki Katainen, vice-president for Jobs, Growth, Investment and Competitiveness.

“By setting minimum standards and reinforcing the enforcement, the proposal should ensure that these operators are able to compete on fair terms.”

The unfair trading practices to be banned are late payments for perishable food products, last-minute order cancellations, unilateral or retroactive changes to contracts and forcing the supplier to pay for wasted products.

“An efficient and effective food supply chain is a fair one. Today’s proposal is fundamentally about fairness – about giving voice to the voiceless – for those who, through no fault of their own, find themselves the victims of a weak bargaining position,” said Phil Hogan, the agriculture and rural development commissioner.

Other practices will only be permitted subject to a clear and unambiguous upfront agreement between the parties, such as a buyer returning unsold food products to a supplier, or a supplier paying for the promotion or the marketing of food products sold by the buyer.

The proposal requires European Union member states to designate a public authority in charge of enforcing the new regulations, who will be able to impose a proportionate and dissuasive sanction in the case of proven infringement.

Parties filing a complaint will be able to request confidentiality and anonymity to protect their relationship with their trading partner.

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