Tuesday, 27 July 2021 12:46

Commission moves against EU countries over unfair trading practices Featured


The European Commission on Tuesday (27 July) opened infringement procedures against 12 member states after they failed to transpose EU rules banning unfair trading practices in the agri-food sector within the allotted time frame.

The directive aims to redress the imbalances in the EU food supply chain created by large operators against trading partners with weak bargaining power, such as individual farmers and smallholders, in a bid to protect European farmers.

It does this by banning certain unfair trading practices (UTPs) imposed unilaterally by one trading partner on another at the EU level in the agricultural and food supply chain,

This includes late payments and last minute order cancellations for perishable food products, unilateral or retroactive changes to contracts, or refusal to commit to written contracts.

The unprecedented adoption of the directive back in April 2019 was championed by many lawmakers at the time.

But there were also warnings that the timescale of its implementation may be challenging given that national parliaments were expected to transpose the directive within two years, by 1 May, 2021.

Battle over unfair trade practices ends, its champion rejoices

On Tuesday (12 March), the European Parliament approved long-awaited legislation on unfair trade practices (UTPs). EURACTIV.com spoke with the lawmaker who shepherded the new rules over the line.

However, as of Tuesday, only 15 member states had notified the Commission that they had adopted all necessary measures for transposing the directive. Another two member states, France and Estonia, have indicated that their legislation only partially transposes the directive, according to a Commission statement.

The Commission therefore sent letters of formal notice to the remaining 12 member states, including Austria, Belgium, Cyprus, Czechia, Estonia, France, Italy, Poland, Portugal, Romania, Slovenia and Spain, requesting them to adopt and notify the relevant measures.

The 12 EU countries now have two months to reply.

The proceedings are part of the Commission’s effort to ensure a “more balanced, fair and efficient supply chain in the agri-food sector,” according to a press release.

The infringement proceedings come on the back of reports from a number of national members of the EU farmers organisation COPA-COGECA of a spike in such practices since the beginning of the COVID-19 pandemic.

This included downward pressure on prices paid to producers whilst consumer prices remain unchanged, especially for perishable products like fruit and vegetables.

At the time, EU farmers association COPA-COGECA warned that these practices clearly deviate from sound and ethical commercial transactions and called on the European Commission to push member states to properly and swiftly transpose and implement the EU directive on combating UTPs along the entire agri-food supply chain.

Socialist MEP Paolo De Castro, who had been instrumental in making the bloc’s UTPs directive happen by negotiating with EU ministers and Europe’s powerful retail and wholesale lobbies, warned that UTPs had a tendency to be particularly prevalent during moments of crises.

“Particularly in this period of crises, there could be situations in which who is stronger in the food chain set the conditions to the weaker,” he told EURACTIV in April 2020.

COVID-19 causing spike in unfair trade practices, farmers complain

Farmers are noticing an increase in the use of unfair trade practices (UTPs) in the wake of the coronavirus pandemic, while the implementation of the EU regulation that should protect them is still in its early stages.