On Monday, the European Agricultural Committee approved a new draft of rules to better protect farmers from unfair trading practices (UTPs).
MEPs are believed to have broadened the scope of the draft law to include every actor in the food supply chain, not just small- and medium-sized producers dealing with large buyers.
Now inclusive in the draft is the trade of agricultural products, ancillary services, and foodstuffs.
Unfair Trading Practices
The new draft also includes a proposed blacklist for certain UTPs, such as payments made later than 30 days for perishable agricultural and food products and no later than 60 days for non-perishable products. It has also blacklisted the cancellation of an order of perishable goods less than 60 days from delivery date.
MEPs also agreed on a series of practices that should be outlawed, including:
- When a buyer refuses to sign a written contract with the supplier or provide the buyer with detailed supply terms.
- When a buyer misuses or shares confidential information relating to the agreement between the two.
- Sales below cost, unless agreed in advance by the two parties.
The MEPs said that the terms of a supply agreement must never result from the supplier’s economic dependence on the buyer.
They also added that, unless pre-agreed, buyers should not sell products below the purchase price only to ask the supplier to bridge the gap.
The draft laws passed with a vote of 38 in favour, four against with two absentees, and will now look for approval to be passed on to EU Ministers.
A Witch Hunt
EuroCommerce, the body that represents the retail sector in Europe, has described the UTP directive as a ‘witch hunt’ against retailers and wholesalers.
“The Commission put forward a proposal aimed at protecting farmers and SME processors,” commented EuroCommerce director general Christian Verschueren.
“In the course of parliamentary discussions, driven by slogans such as ‘Fairness for all’, the directive as amended protects big food multinationals, and the debate has turned into a targeted and direct attack on legitimate negotiations between retailers and suppliers,” he added.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.