Headlong rush on UTP directive is jettisoning EU principles - and won't help any farmer

12 December 2018
by eub2 -- last modified 12 December 2018

Ahead of the final scheduled trilogue on the Unfair Trading Practices Directive tomorrow, retailers and wholesalers warned negotiators not to forget fundamental principles laid down by EU law, or the implications of ignoring them EuroCommerce Director-General Christian Verschueren said:

"We all know that over 20 Member States already have specific legislation on the supply chain. In line with subsidiarity, it makes no sense to add a plethora of rules at EU level which will be appropriate for some Member States and not for others.  That is what subsidiarity is meant for.  We therefore ask negotiators to stand back and ask what arbitrary turnover thresholds for the scope of the directive or a long list of practices prohibited at EU level will achieve, when Member States are already able to go further themselves. Political gesturing, just to be seen to do something, is bad law, especially when there has been no time to assess the impact of what is being proposed. That is why we believe that everyone would be best served by keeping to the Commission proposal."

Negotiators are now looking at the scope of the directive, with figures being floated anywhere between 100 million and 2.5 billion euros turnover as the definition of a supplier who is so weak that it has to be protected against buyers. This argument forgets that the legal base of the proposal is aimed at helping farmers, not powerful national (and multinational) manufacturers, and extending it in this way risks the directive being challenged in court. The SME threshold of 250 employees and 50 million euros turnover covers almost any farmer in Europe – those arguing for more need to explain whom they are seeking to protect.  Any threshold fixed at EU level above the SME definition will be too high for small countries – how many suppliers in Luxembourg have a turnover of 2.5 billion euros? This is why the Commission opted for a minimum harmonisation directive which allows Member States, over 20 of whom already have legislation, to decide where to add further measures.  This is spelled out explicitly in the directive. In an EU made up of very diverse Member States, this subsidiarity approach makes absolute sense. On top of this, the shortcomings of some other amendments are becoming apparent, such as what happens where buyer and seller are the same size.

Verschueren added:

"The discussion on the scope of the directive has moved far away from what it was meant to be about – helping farmers – to a political discussion about how large a company should be to be "protected" from a buyer. Any threshold above the SME definition proposed by the Commission will be arbitrary, and risks covering all manufacturers in smaller Member States.  It is surely time for negotiators to remember some fundamental EU principles: subsidiarity, proportionality, proper assessment of the impact of legislation; and respect of the Treaty".

EuroCommerce is the voice for six million retail, wholesale, and other trading companies. Its members include national commerce federations in 31 countries, Europe's 27 leading retail and wholesale companies, and federations representing specific sectors of commerce.

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