UTPs: EU overwhelmingly backs ‘correcting power imbalances’

Today’s formal adoption and overwhelming support by the European Parliament on the directive to tackle unfair trading practices in the agricultural and food supply chain, has been welcomed by Mairead McGuinness MEP and first Vice-President of the European Parliament.

It was adopted 589 votes in favour, 72 against and nine abstentions.

In 2016, 600 MEPs led by McGuinness called on the European Commission to come forward with a legislative proposal to tackle issues such as late payments, payment for storage, cancelling orders at short notice and safeguarding suppliers right to request a written contract.

McGuinness said today that this legislation is very much a stepping stone in correcting power imbalances in the food supply chain.

She added that it comes at a critical time when sustainability, environmental issues and climate action are on the agenda, with the agriculture and food sectors called on to deliver more.

“It’s a hugely significant piece of legislation which for the first time curtails the capacity of the powerful to squeeze the less powerful in the food supply chain,” McGuinness stated.

The Fine Gael Midlands North West MEP said today is a very important day for agricultural producers both in the EU and in third countries.

“Member states can go beyond what is contained in this directive, which protects suppliers with a turnover of up to €350 million, against buyers with a turnover above €2 million.

This means that a supplier can lodge a complaint with an enforcement authority in their own member state or in the member state in which the buyer is located if they believe that they are a victim of a UTP.

“The Competition and Consumer Protection Commission (CCPC) oversees the Grocery Goods Regulations 2016 in Ireland.

“They have raised concerns about its ability to implement and enforce this directive,” McGuinness explained.

The CCPC has called for a separate regulator. Work is ongoing between the two responsible departments – the Department of Agriculture and the Department of Business, Enterprise and Innovation – to find a way forward.

The directive bans 16 specific practices listed as unfair, including the sharing or misuse of confidential information relating to the supply agreement. It guards against suppliers being penalised for filing a complaint.

“The actions of buyers in third countries is important to ensure that the rules are not circumvented by buyers establishing themselves outside the EU.

“In light of Brexit this point is very important,” McGuinness said.

“This directive should result in rebalancing the food chain and ensure that the issue of public goods are rewarded in the food chain at a time when there is increased emphasis on sustainability,” she stated.

The directive has to be transposed into Irish law within 24 months, with a review to take place four years after that, the EU representative concluded.