Breakthrough As EU Agrees to Tackle Unfair Trading Practices in the Food Supply Chain
Today’s agreement on rules to tackle unfair practices, such as delisting, hello money and order cancellations, in the agricultural and food supply chain has been described as “an important development” by Mairead McGuinness MEP and first Vice-President of the European Parliament and lead negotiator for the biggest political grouping in the Parliament, the EPP.
“This is a first, a significant moment with the EU introducing legislation to deal with unfair practices by buyers in the agricultural and food chain,” she said.
Suppliers with an annual turnover of up to €350 million will be protected by this new law which applies to unfair practices by buyers in the chain, including retailers.
The Directive prohibits specific practices:
- Late payments
- Order cancellations
- Unilateral changes to contracts
- ‘Hello’ money
- Misuse of commercial information
- Retaliation or threats to retaliate commercially against the supplier.
Ms. McGuinness, who has spearheaded the issue for over a decade and garnered the support of 600 members of the European Parliament to call for legislative action, said today marks a “breakthrough” for European producers.
Under the law food producers can lodge complaints with enforcement authorities in their own Member States.
“In Ireland it is expected that the relevant authority is the Competition and Consumer Protection Commission which will enforce the new directive, when it is transposed into Irish law,” she said.
Enforcement authorities will have power to impose fines and sanctions. They will have to take specific factors into account when setting the penalties, including whether or not the buyer is a repeat infringer.
Naming and shaming of infringers is also envisaged.
“This Directive is very much a stepping stone to having a more robust, fair and sustainable food supply chain,” Ms McGuinness said.
“While we’re happy with the agreement reached, as negotiators we have insisted that the Directive must be evaluated within four years and a decision taken if further legislation is required,” she said.