Fairness in the food supply chain: Member States to apply EU rules banning unfair trading practices at national level

Member States have until tomorrow, 1 May 2021, to transpose EU rules banning unfair trading practices into national law. The Directive, adopted on 17 April 2019, ensures protection of 100% of European farmers as well as small and mid-range suppliers against unfair trading practices from larger buyers in the food supply chain. It covers agricultural and food products traded in the supply chain, banning for the first time at EU level 16 unfair trading practices imposed unilaterally by one trading partner on another.

Farmers and small and medium sized suppliers, and their organisations, will have the possibility to file complaints against such practices from their buyers. Member States should put in place designated national authorities that will handle the complaints. Confidentiality is protected under these rules to avoid any retaliation from buyers.

The unfair trading practices to be banned include, among others, late payments and last minute order cancellations for perishable food products; unilateral or retroactive changes to contracts; or forcing the supplier to pay for wasted products and refusing written contracts.

Other practices will only be permitted if subject to a clear and unambiguous upfront agreement between the parties: a buyer returning unsold food products to a supplier; a buyer charging a supplier payment to secure or maintain a supply agreement on food products; a supplier paying for a buyer’s promotion, advertising or marketing campaign.

The rules provide minimum harmonisation on unfair trading practices in all Member States, while Member States retain their right to go further than the Directive’s minimum standard.