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EU institutions reach agreement on unfair trading in the food supply chain

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04/02/2019

On 19 December, the European Parliament, the Council and the Commission reached an agreement on the Commission’s proposal for a directive that aims to protect businesses in the food supply chain.

The Commission proposal originally included 4 trade practices that are, in any case, prohibited – the Commission reports that now, the draft directive contains 16 such prohibitions. Those practices include the late payment of perishable food products (i.e. more than 30 days after receive the invoice), cancelling an order for perishable food products at very short notice, unilaterally and retroactively changing the terms of a supply agreement and stipulating that the supplier will bear the costs of wastage on the buyer’s premises.

Other practices are not unconditionally prohibited, but are only allowed when they have been clearly stipulated in the supply agreement. These practices include returning unsold food products to the supplier or charging the supplier for the costs of storage, display or advertisement of food products.

Complaints can be filed with national enforcement authorities by suppliers or producer organisations. On request, these complaints will be treated confidentially if disclosure would be harmful to the complainant’s interests.

The directive will, according to a Commission press release, “apply to anyone in the food supply chain with a turnover of € 350 million with differentiated levels of protection below that threshold”. This presumably means that the protection offered by the future directive (and not the prohibitions it provides) will apply to businesses below that threshold.

The next steps in the legislative process will include a vote on the revised proposal in the European Parliament, and adoption in the Council. Finally, Member States will have to transpose the directive, most likely within 6 months of its entry into force.