UTPs: ‘Big buyers making excessive profits should be named and shamed’

The newly-adopted EU directive on unfair trading practices (UTPs) in the food-supply chain “does not go far enough”, according to the Irish Cattle Sheep Farmers’ Association (ICSA).

On Wednesday (March 13) the European Parliament adopted the Unfair Trading Practices Directive which has been in the pipeline for the last 12 months.

The directive aims to target business practices that deviate from “good commercial conduct” and are contrary to good faith and fair dealing.

Punch told AgriLand that while the organisation welcomes the move by Phil Hogan, the EU Commissioner for Agriculture and Rural Development, and it was “an important first step” in regularising supermarkets, he contended that the new directive was “not going to help” the beef sector in the current climate.

The directive looks at very specific issues, like unfair terms of a contract and last minute order cancellations.

Punch added: “Unfortunately, none of these matters relate to what is happening in the beef and dairy sectors.

“What needs to happen is transparency; there needs to be more transparency around margins in the food chain.”

‘Name and shame’

Meanwhile, the EU stated that the food-supply chain was “vulnerable” to unfair trading practices because of the “stark imbalances” between small and large operators.

It also pointed to the fact that very often farmers and small operators in the food-supply chain do not have sufficient bargaining power to defend against the practices.

“What ICSA wants is for the EU to audit the margins in the food chain.

This can be done without revealing precise details of business, but having said that, if someone is taking excessive profits then they should be named and shamed.

“This directive is important, however, because food is important and in fact it is too important to leave it to the decisions of just a few multi-national corporations.”

The unfair trading practices to be banned include: late payments for perishable food products; last minute order cancellations; unilateral changes to contracts; refusal to enter into a written contract; returning unsold or wasted products; and payment for buyer’s marketing.

Each EU member state is also required to designate a competent authority to enforce the new rules.

The directive covers: retailers; food processors; wholesalers; cooperatives or producer organisations; and single producers that engage in any of the unfair trade practices identified.