Report on unfair business-to-business trading practices in the food supply chain

Summary:

Report published by the European Commission in January 2016 on the existing frameworks for tackling unfair trading practices (UTPs).

Further information:

UTPs are practices that deviate grossly from good commercial conduct, are contrary to good faith and fair dealing and are unilaterally imposed by one trading partner on another. The European Commission published a Communication in July 2014 which urges operators in the European food supply chain to participate in voluntary schemes aimed at promoting best practices and reducing UTPs, and emphasised the importance of effective and independent enforcement at national level.

In 2015, the discussion intensified, not least because of the difficulties faced by European farmers caused by falling prices for certain agricultural commodities. Demand for a number of products weakened significantly, and this was aggravated by the Russian import ban on agricultural products. At the same time, world production increased, leading to a general oversupply. Low prices made farmers more vulnerable to potential unfair behaviour by their trading partners. In response to the challenges faced by farmers, the Ministers of Agriculture of seven countries issued a joint statement asking the European Commission to take its analysis on UTPs further and propose EU legislation to address UTPs.

The Commission responded to that crisis with a package of measures. However, this report does not cover the UTP-specific measures adopted for particular sectors. The document focuses on the existing frameworks for tackling UTPs. It has two main elements:

1. an assessment of the existing regulatory and enforcement frameworks in the Member States;
2. an assessment of the impact of the voluntary EU-wide Supply Chain Initiative (SCI) and the national SCI platforms that have been set up.

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