EU plans to ban unfair practices in food supply chain

The European Commission has set out plans to ban unfair trade practices in the food supply chain including late payments for perishable food products, last minute order cancellations, unilateral or retroactive changes to contracts and forcing the supplier to pay for wasted products.

It said the aim of the changes was to ensure fairer treatment for farmers and SMEs.

Some practices will only be permitted if subject to a clear and unambiguous upfront agreement between the parties: a buyer returning unsold food products to a supplier; a buyer charging a supplier payment to secure or maintain a supply agreement on food products; a supplier paying for the promotion or the marketing of food products sold by the buyer.

The proposal includes effective enforcement provisions: sanctions can be imposed by national authorities where infringements are established.

Agriculture and rural development commissioner Phil Hogan said: “Any chain is only as strong as its weakest link. An efficient and effective food supply chain is a fair one. Today’s proposal is fundamentally about fairness – about giving voice to the voiceless – for those who, through no fault of their own, find themselves the victims of a weak bargaining position.

“Today’s initiative to ban unfair trading practices is about strengthening the position of producers and SMEs in the food supply chain. The initiative is equally about providing strong and effective enforcement. We are looking to eliminate the “fear factor” in the food supply chain, through a confidential complaints procedure.”