EU reaches agreement to tackle unfair trading practices

An agreement has been reached today (Wednesday, December 19) on rules to tackle unfair trading practices.

As part of the agreement, practices such as delisting, ‘hello money’ and order cancellations in the agricultural and food supply chain will be clamped down on.

The agreement has been described as “an important development” by Mairead McGuinness, First Vice-President of the European Parliament.

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.

McGuinness, who outlined she has been tackling the issue for over a decade, garnered the support of 600 members of the European Parliament in calling for legislative action and said that today marks a “breakthrough” for European producers.

Under the law, food producers can lodge complaints with enforcement authorities in their own Member States.

The directive prohibits specific practices such as:
  • Late payments;
  • Order cancellations;
  • Unilateral changes to contracts;
  • ‘Hello money’;
  • Misuse of commercial information;
  • Retaliation or threats to respond commercially against the supplier.

The Midlands, North-West MEP continued: “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.

“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.”

She noted that naming and shaming of infringers is also envisaged.

McGuinness stressed: “This directive is very much a stepping stone to having a more robust, fair and sustainable food supply chain.”

Concluding, she outlined: “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.”