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EU aims to ban unfair trading practices

The European Commission wants to stamp out the "fear factor" in the food supply chain with sanctions for malpractice

EU aims to ban unfair trading practices

Small suppliers lack bargaining power in the supply chain

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The EU is calling time on unfair trading practices such as late payments and last minute order cancellations with new proposals to ban supply chain malpractice.

Agriculture and rural development commissioner Phil Hogan promised today “to give a voice to the voiceless” by improving the bargaining power of smaller food suppliers.

The EU Commission cites retroactive contract changes, last minute order cancellations, late payments and forcing the supplier to pay for wasted products as key examples of malpractice they hope to eradicate.

They hope the proposal will take the form of a European directive and will be submitted to the European Parliament and the Council.

Vice-President for jobs, growth, investment and competitiveness, Jyrki Katainen, said: "There are imbalances of bargaining power in the food supply chain and 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. By setting minimum standards and reinforcing the enforcement, the proposal should ensure that these operators are able to compete on fair terms, thereby contributing to the overall efficiency of the chain. This is a clear statement for more fair business conduct."

The Commission's proposal requires member states to designate a public authority in charge of enforcing the new rules. In cases of proven infringement, the responsible bodycould impose sanctions on the culprit.

This enforcement authority will also be able to initiate investigations of its own initiative or based on a complaint, which can be made anonymously to protect their business.

Hogan added: "Any chain is only as strong as its weakest link. 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.

“Today's initiative to ban unfair trading practices is about strengthening the position of producers and SMEs in the food supply chain. The initiative is equally about providing strong and effective enforcement. We are looking to eliminate the "fear factor" in the food supply chain, through a confidential complaints procedure."

In 2016 the commission set up the Agricultural Markets Task Force (AMTF) to assess the role of farmers in the wider food supply chain and make recommendations on how it can be strengthened.

A recent EU-wide opinion poll published in February 2018 revealed 88 per cent of respondents considered strengthening farmers' role in the food supply chain as important.

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