Awareness among farmers and operators in the agri-food supply chain of unfair trading practices (UTPs) is “still too low”, according to a new report from the European Commission.
The commission said that its report on the implementation of the directive on UTPs – which became law in all EU member states in mid-2021 – was one of the commitments in response to farmer protests around Europe earlier this year.
The report is based on a survey targeting farmers and agri-food operators in the EU that was carried out by the commission between late February and mid-March.
The report outlines some “areas for improvement”, especially around awareness, with only 38% of respondents saying they were aware of the existence of EU rules on UTPs.
Furthermore, a majority of respondents (57%) said they did not know about their country’s national enforcement authority (which, in the case of Ireland, is An Rialálaí Agraibhia/The Agri-Food Regulator).
Notably, 30% of respondents said that fear of some sort of retaliation from buyers prevented them from reporting on UTPs that they were on the receiving end of.
As well as that, 23% of respondents said they did not report UTPs because they believed that the UTP in question was standard practice in the sector; while 17% of respondents did not report UTPs because they felt the relevant national enforcement authority would not be able to handle it.
The report also says that proper cross-border enforcement of UTPs across member states “still faces too many hurdles”, despite the existence of the UTP Enforcement Network, which the commission established to bring together representatives of the various national enforcement authorities.
On foot of this new report, the commission said it will propose new rules on cross-border enforcement against UTPs.
The directive on unfair trading practices prohibits 16 practices in the agri-food supply chain, as follows:
- 10 ‘black’ UTPs (prohibited in all circumstances):
- Payment later than 30 days for perishable goods;
- Payment later than 60 days for non-perishable goods;
- Short-notice cancellation of purchase of perishable goods;
- Unilateral contract changes by buyer;
- Payment for unrelated services;
- Risk of loss and deterioration transferred to supplier;
- Refusal of a written confirmation of supply agreements by buyer;
- Misuse of trade secrets by buyer;
- Commercial retaliation by buyer;
- Transferring cost of examining consumer complaints to supplier;
- Six ‘grey’ UTPs (prohibited except where clearly agreed between supplier and buyer):
- Buyer returning unsold products to supplier;
- Supplier paying for stocking, display, and listing;
- Supplier paying for promotion;
- Supplier paying for advertising;
- Supplier paying for marketing;
- Supplier paying for buyer’s staff or fitting out of premises.
The report found that a large majority of member states have adopted a higher level of protection, making use of the possibility to adopt or maintain national rules that go beyond the practices banned by the directive.
National enforcement authorities have been designated in all EU countries. In 2023, around 1,500 investigations were opened by these authorities, of which about 17% resulted in a finding of infringement and the issuance of a fine to the offending party.
The most frequently-detected UTPs last year were late payments for perishable goods, and late payment for non-perishable goods, with 50% and 13% of respondents respectively reporting that they have experienced these infringements.
About 41% of UTPs detected in 2023 were detected at retail level, 36% at the level of food industry, and 22% at the level of wholesale trade.
The commission said this new report will help inform the evaluation of the implementation of the UTP directive. This evaluation will take place in 2025, and will, if appropriate, be accompanied by legislative proposals.