Sheep farming – Photo by NJR ZA
(STRASBOURG) – New rules to protect farmers against buyers unfair trading practices, approved Monday by the EU Parliament’s agriculture committee, have been criticised as a witch hunt against retailers and wholesalers.
EuroCommerce, speaking for retailers and wholesalers, said the amendments pushed through by MEPs “will do nothing for fairness in the supply chain,” and will “end up making the strongest players in the market even stronger and the weaker players – farmers, SMEs, and consumers – even weaker.”
MEPs had broadened the scope of the draft Commission proposal – aimed at protecting farmers and SME processors – to include all actors in the food supply chain, and not only small and medium-sized producers and big buyers; and also to cover trade of agricultural products and ancillary services, on top of foodstuffs.
The proposed blacklist of unfair trading practices (UTPs), as amended by MEPs, includes:
- payments made later than 30 days for perishable agricultural and food products and (added by MEPs) later than 60 days for non-perishable products, counting from the last day of the month when the invoice was received or the agreed delivery day,
- unilateral cancellation of an order of perishable products less than 60 days from the agreed delivery date (Commission proposed no clear deadline).
MEPs also agreed that also the following practices should be outlawed:
- when a buyer refuses to sign a written contract with the supplier, who would now have a newly established right to request it, or to provide the latter with sufficiently detailed supply terms;
- when a buyer shares or misuses confidential information, relating to the supply agreement.
The committee said that terms of a supply agreement must never result from the supplier’s economic dependence on the buyer. And MEPs insisted that unless pre-agreed, the buyer should not sell products below the purchase price and then ask the supplier to bridge the gap.
With a view to making ‘life easier for food producers’, MEPs proposed to allow them to lodge complaints where they are established, even if UTPs occurred elsewhere in the EU. National enforcement authorities would be handling complaints and, following an investigation, imposing sanctions.
The draft law’s rapporteur Paolo De Castro MEP said: “In this battle of David versus Goliath, we are arming the weakest in the food supply chain to ensure fairness, healthier food and social rights. Small producers, workers, consumers, all of us, will soon stop suffering the consequences of unfair trade practices imposed by big players in the food supply chain.”
However, EuroCommerce Director-General Christian Verschueren said that “In the course of parliamentary discussions, driven by slogans such as ‘Fairness for all’, the directive as amended protects big food multinationals, and the debate has turned into a targeted and direct attack on legitimate negotiations between retailers and suppliers.”
By imposing more restrictions on retailers and their ability to provide services, it will make it more difficult for retailers to negotiate the better prices they pass on to consumers, in particular when negotiating with large suppliers,” he said.
The text approved in the committee will now be submitted to the plenary to seek MEPs’ green light for negotiations with EU ministers.
Further information, European Parliament
