Which of the following is not specifically prohibited by state law as an unfair trade practice

Unfair trading practices explained

Unfair trading practices (UTPs) in business-to-business relationships deviate from good commercial conduct and are contrary to good faith and fair dealing. The food supply chain is vulnerable to unfair trading practices due to stark imbalances between small and large operators. Farmers and small operators in the food supply chain often do not have sufficient bargaining power to defend against them.

The European Union therefore decided to improve the protection of farmers – as well as of small and medium sized suppliers – and provide mandatory rules that outlaw certain unfair trading practices.

The EU Directive 2019/633 on unfair trading practices in the agricultural and food supply chain was adopted by the European Parliament and Council on 17 April 2019. EU countries were required to transpose the Directive into national law by 1 May 2021 and apply it six months later.

This is part of a wider governance agenda, which aims to achieve a more efficient and fairer food supply chain, and which also includes producer cooperation and measures to enhance market transparency. The Farm to Fork Strategy is also designed to contribute to improving farmers’ position in the food supply chain.

On 27 October 2021, the Commission published an interim report on the state of play of the UTP Directive.

Combatting unfair trading practices

To improve the position of both farmers and small and medium sized businesses in the food supply chain, the EU has adopted legislation that bans 16 unfair trading practices. This Directive distinguishes between 'black' and 'grey' practices. Whereas black unfair trading practices are prohibited, whatever the circumstances, grey practices are allowed if the supplier and the buyer agree on them beforehand in a clear and unambiguous manner.

Ten black unfair trading practices

  • Payments later than 30 days for perishable agricultural and food products
  • Payment later than 60 days for other agri-food products
  • Short-notice cancellations of perishable agri-food products
  • Unilateral contract changes by the buyer
  • Payments not related to a specific transaction
  • Risk of loss and deterioration transferred to the supplier
  • Refusal of a written confirmation of a supply agreement by the buyer, despite request from the supplier
  • Misuse of trade secrets by the buyer
  • Commercial retaliation by the buyer
  • Transferring the costs of examining customer complaints to the supplier

Six grey unfair trading practices

These are allowed only if agreed beforehand in a clear and unambiguous manner.

  • Return of unsold products
  • Payment of the supplier for stocking, display and listing
  • Payment of the supplier for promotion
  • Payment of the supplier for marketing
  • Payment of the supplier for advertising
  • Payment of the supplier for staff of the buyer, fitting out premises

The Directive provides minimum harmonisation on unfair trading practices in all EU countries. This will ensure a level playing field on those practices, which were identified as the most problematic.

Key rules of the Directive

Protection of weaker suppliers against stronger buyers

The Directive provides for the protection of weaker suppliers against stronger buyers, which includes any supplier of agricultural and food products with a turnover of up to €350 million with differentiated levels of protection provided below that threshold. This covers farmers, producer organisations and distributors below the threshold. This also applies to suppliers and buyers located outside the EU, provided one of the parties is located within the EU.

National transposition

When transposing the Directive into their national law, EU countries can choose to be stricter than the Directive and go beyond its scope. However, they cannot offer less protection than that foreseen by the Directive.

The Commission published an interim report on the state of the transposition and implementation of the Directive. By 31 July 2021, 16 EU countries had notified its complete transposition into national law. A more comprehensive view of the state of transposition will emerge once the remaining Member States submit their notifications. An evaluation of the Directive at EU level is due end of 2025.

Transposition measures per EU country

Opening of infringement procedures against 12 EU countries

Enforcement authorities

Each EU country has to designate a competent authority to enforce these rules. These authorities must have the power to both launch investigations and fine operators who break the rules.

CountryEnforcement authorityContact details
Austria Federal Ministry for Digital and Economic Affairs; Directorate III EU and international market strategies

E-mail:
Phone: +43 1 711 00-805556

Belgium DG for Economic Inspection of the FPS Economy – FR / NL

E-mail:

Bulgaria Commission for the Protection of Competition

E-mail:

Croatia The Croatian Competition Agency (Agencija za zaštitu tržišnog natjecanja)

E-mail:
Phone: +385 1 617 64 48
Fax: +385 1 617 64 50

Cyprus Department of Agriculture, Ministry of Agriculture, Rural Development and Environment

E-mail:
Phone: +357 22 408 519
Fax: +357 22 781 425

Czechia Office for the Protection of Competition

E-mail:
Phone: +420 542 167 111

International department
Phone: +420 542 167 795
Fax: +420 542 167 11

Denmark Danish Competition and Consumer Authority

E-mail:
Phone: +45 4171 5000

Estonia Estonian Competition Authority

E-mail:
Phone: +372 667 2400

Finland Finnish Food Market Ombudsman E-mail:
France Directorate-General for Competition, Consumer Affairs and Fraud Control (DGCCRF) Contact: via contact form on the website
Phone: +33 (0) 1 44 87 17 17
Germany Federal Office for Agriculture and Food (Bundesanstalt für Landwirtschaft und Ernährung - BLE) E-mail:
Phone: +49 228 6845-0
Greece Committee for Combating Unfair Trading Practices – Ministry of Rural Development and Food of Greece E-mail:
Phone: +0302102124289
Hungary NEBIH (National Food Chain Safety Office) E-mail:
Phone: +36-1-336-9000
Ireland Unfair Trading Practices (UTP) Enforcement Authority E-mail:
Phone: +353 (0) 1 5058607
Italy Italian Ministry of Agricultural, Food and Forestry Policies - ICQRF Department E-mail:
Phone: +39 06 4824047 / +39 06 4884467
Latvia The Competition Council of Latvia E-mail:
Phone: +371 6728 2865
Lithuania Public Institution Rural Business and Markets Development Agency E-mail:
Phone: +370 52 649035
Luxembourg Conseil de la concurrence E-mail:
Phone: +352 2478 4174
Malta Unfair Trading Practices Board E-mail:
Netherlands Authority for Consumers & Markets (ACM) E-mail:
Phone: +31 70 7222 000
Fax: +31 70 7222 355
Poland Urząd Ochrony Konkurencji i Konsumentów (Office of Competition and Consumer Protection) E-mail:
Phone: + 48 22 55 60 800
Portugal Autoridade de Segurança Alimentar e Económica E-mail:
Phone: +351 217 983 600
Fax: +351 217 983 654
Romania Consiliul Concurentei E-mail:
Slovakia Ministry of Agriculture and Rural Development of the Slovak Republic

E-mail:

Slovenia Slovenian Competition Protection Agency

E-mail:
Phone: +386 1 478 3597

Spain Agencia de Información y Control Alimentarios (AICA)

E-mail:
Phone: +34-913478374

Sweden Swedish Competition Authority

E-mail:
Phone: +46 8 700 1600

Complaints

The Directive contains measures, including the protection of the complainants, to help weaker suppliers exercise their rights. They can choose which enforcement authority they want to file a complaint with: their national authority, or the authority of the EU country, where the buyer is located.

Related information

Brochure: Directive on unfair trading practices in the agriculture and food supply chain

English

(2.43 MB - PDF)

Download

Factsheet: Directive on unfair trading practices in the agriculture and food supply chain

English

(442.81 KB - PDF)

Download

Agricultural markets task force

The Commission’s efforts to strengthen farmers’ position in the food supply chain draws on the work of the agricultural markets task force.

This group of 12 high-level experts on the food supply chain, under the chairmanship of Cees Veerman met between January and November 2016 to discuss a wide range of issues affecting agricultural markets and the role of farmers. A final report was issued on enhancing the position of farmers in the supply chain.

Full report: Improving market outcomes – enhancing the position of farmers in the supply chain

English

(1.86 MB - PDF)

Download

Executive summary: Improving market outcomes – enhancing the position of farmers in the supply chain

English

(105.97 KB - PDF)

Download

  • Download
  • français

    (104.96 KB - PDF)

    Download

Other Commission initiatives designed to improve the functioning of the food supply chain include the high level forum on the better functioning of the food supply chain, established in 2010.

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