Associations of Farmers and Producers Salutes New Legislative Project on Unfair Trading Practices
The 11 million farmers and 293.000 food producers from Europe welcome the vote by members of the European Parliament’s Internal Market and Consumer Protection Committee on the UTPs Directive as a clear step towards ensuring a fair and well functioning food supply chain in Europe, according to a press release signed by farmers’ and producers’ organizations.
“The signatories call on the co-legislators to adopt strong and effective measures against unfair trading practices. Without a law that includes all actors, everyone will be exposed, directly or indirectly, to unfair trading practices. What is unfair is unfair, no matter who you are. We urge the EU Parliament, Commission and Council in the upcoming weeks and months to deliver a solid framework for fairness and certainty", according to the documents signed by the European Brands Association (AIM), farmer’s associations – CEJA, Copa and Cogeca, the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT), FoodDrinkEurope, IFOAM EU and EFTA.
The European Commission (EC) proposal aims to improve the role of farmers in the wider food supply chain by banning some of the most common UTPs that they face. These include:
- late payments for perishable food products;
- last minute order cancellations;
- unilateral or retroactive changes to contracts.
In addition, the European Commission proposes that each EU member state designate a competent authority to enforce the new rules, and sets out the minimum enforcement powers of such authorities.
The legislative proposals come after an inception impact assessment and a public cons ultation on how to make the EU food supply chain fairer, focusing not only on unfair trading practices but also on other key issues such as market transparency and producer cooperation.
EU legislation has for many years allowed for cooperation between producers of certain products in order to strengthen their bargaining position without breaching EU competition rules, and further improvements were introduced in 2017.
Possible measures concerning enhanced market transparency, in addition to the existing market observatories and dashboards produced by the Commission are expected by the end of 2018.
The European Commission considers unfair trading practices (UTPs) business-to-business practices that deviate from good commercial conduct and that are contrary to good faith and fair dealing. The food supply chain is vulnerable to UTPs due to stark imbalances between small and large operators. Often farmers and small operators in the food supply chain do not have sufficient bargaining power to defend against UTPs, the EC says.
