The Joint Oireachtas Committee on Agriculture, Food and the Marine has called for companies that engage in unfair trading practices (UTPs) to be fined either €10 million or 10% of their turnover.

The committee published a report today (Thursday, October 6) on its pre-legislative scrutiny of the Agriculture and Food Supply Chain Bill 2022 – the bill which will establish the Office for Fairness and Transparency in the Agri-Food Supply Chain.

Th report makes several recommendations in advance of the bill making its way through the Oireachtas. The committee is calling for these recommendations to be included in the legislation.

Among the recommendations is a change to the fine structure for persons or entities that commit an offence under the bill.

In the current draft version of the legislation, this fine is limited to €500,000. The committee calls for this fine to be increased to either €10 million or 10% of a company’s global turnover, whichever is greater.

The report said that this move would act as a deterrent to larger operators in committing an offence under the bill.

The committee has also called for the name of office to be changed to National Food Regulator.

Other key recommendations contained in the report include:

  • Giving the office the power to ask for and see market-sensitive data that is not publicly available;
  • Allowing the office to conduct random inspections on suppliers and buyers to ensure continued compliance with rules on UTPs;
  • Obliging the office to conduct and publish regular analysis and reports on comparable price and market information elsewhere in the EU, in the UK, and among international trading partners;
  • Increasing the number of members of the board of the office in line with other state bodies such as Bord Bia and Teagasc (which both have 11 members on their respective boards). The current draft legislation proposes a six-member board;
  • Increasing the time limit for persecution of offences under the bill from two years to three years after the date of the alleged offence.

Speaking at the launch of the report at Leinster House today, committee chairperson Jackie Cahill said: “For years, stakeholders in the agri-food sector have advocated for a regulator in the food supply chain to ensure fairness, equity and transparency from the primary producer to the consumer.

“The sector plays a vital role in rural employment and contributes significantly to both the national and rural economy,” he added.

“The bill reflects the EU’s UTP policy and the commitment made in the Programme for Government… The committee hopes that, with the establishment of this proposed office, the sector will see an improvement in the position of primary producers.”

EU Directive 2019/6331 on UTPs in the agricultural and food supply chain was adopted by the European Parliament and the Council of the EU in April 2019. EU Member States were required to transpose the directive into national law by May 1, 2021.

In April 2021, Minister for Agriculture, Food and the Marine Charlie McConalogue signed a statutory instrument transposing the UTP directive into Irish law.

At the time, the minister created an interim UTP Enforcement Authority within his department. The new Office for Fairness and Transparency in the Agri-Food Supply Chain will take over the functions of the Enforcement Authority.

The UTP regulation aims to protect farmers, farmers’ organisations and other weaker suppliers in the agriculture and food supply chain against stronger buyers by prohibiting 16 specific UTPs.

10 of these are prohibited in all circumstances and six are prohibited unless the parties agree clearly and unambiguously beforehand.

The UTPs are as follows:

  • Prohibited in all circumstances:
    • Payment later than 30 days for perishable agricultural and food products;
    • Payment later than 60 days for other agricultural and food products;
    • Short-notice cancellations of perishable agricultural and food products;
    • Unilateral contract changes by the buyer;
    • Payment not related to a specific transaction;
    • Risk of loss and deterioration transferred to the supplier;
    • Refusal of written confirmation of a supply agreement by the buyer, despite request of the supplier;
    • Misuse of trade secrets by the buyer;
    • Commercial retaliation by the buyer;
    • Transferring the costs of examining customer complaints to the supplier.
  • Prohibited unless otherwise agreed:
    • The buyer returns unsold products to the supplier without paying for those unsold products;
    • Payment by the supplier for stocking, display and listing;
    • Payment by the supplier for promotion;
    • Payment by the supplier for marketing;
    • Payment by the supplier for advertising;
    • Payment by the supplier for staff of the buyer and fitting out premises.
JOINT OIREACHTAS COMMITTEE ON AGRICULTURE UNFAIR TRADING PRACTICES