The European Parliament today voted in a new set of EU rules that will ensure protection of European farmers and small and mid-range suppliers against unfair trading practices in the food supply chain.
The new European law will cover agricultural and food products traded in the food supply chain, banning for the first time up to 16 unfair trading practices imposed unilaterally by one trading partner on another.
The new rules will apply to anyone involved in the food supply chain with a turnover of €350 million, with differentiated levels of protection provided below that threshold.
The unfair trading practices to be banned include late payments for perishable food products, last-minute order cancellations, unilateral or retroactive changes to contracts, forcing the supplier to pay for wasted products and refusing written contracts.
Other practices will only be permitted if subject to a clear agreement between the parties, for example 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, or a supplier paying for a buyer's promotion, advertising or marketing campaign.
Member States are now expected to formally endorse the new rules before they can enter into force.
Following today's vote, Phil Hogan, Commissioner for Agriculture and Rural Development, said:
“Today's vote is fundamentally about fairness for farmers in the food supply chain. The Commission tabled this proposal in April 2018 to ensure that farmers are treated fairly by parties throughout the food supply chain, and to provide this minimum protection all across the EU. This law is one of the key proposals of the Agricultural Markets Taskforce. Today's vote demonstrates our ability to deliver for EU citizens.”
The Proposal for the Directive, which was agreed on by the European Parliament, the Council and the Commission in December last year, builds on a 2017 JRC report on Unfair trading practices in the food supply chain: A literature review on methodologies, impacts and regulatory aspects, which summarised the findings of a JRC workshop on unfair trading practices in the food supply chain.
The report analysed:
- the strengths and weaknesses of methodologies applied to analyse unfair trading practices;
- the empirical evidence on the socioeconomic impacts of unfair trading practices;
- the regulatory aspects and enforcement costs involved; and
- how to better understand unfair trading practices in food supply chains.
The results were extensively used in the European Commission's accompanying Impact Assessment and the Proposal.