Towards a Fair Food Supply Chain
23 September 2021
By request of the Slovenian Presidency, the Agriculture, Rural Development and Environment (NAT) section of the European Economic and Social Committee (EESC) has prepared an exploratory opinion on the effective achievement of the objectives of the Directive on unfair trading practices in the agricultural and food supply chain. The opinion includes best practices from Member States and offers guidance for an effective transposition and implementation.
In its opinion, the EESC welcomes the EU Directive as a step forward in addressing power imbalances along the chain. It stresses the importance of fair prices as enabling factor for investment, innovation and sustainable production; welcomes the resilience of the food supply chain during the COVID crisis; and calls for an ambitious transposition and implementation of the Directive by EU Member States
The EESC particularly highlights the cases of Member States which have gone beyond the minimum standards imposed by the Directive and taken legislative action to offer additional protection to supply chain actors by, for example:
- Putting a ban on the return of unsold products without paying for them or in passing the buyer’s storage cost onto the supplier (Germany)
- Forbidding buying below production cost (Spain, possibly Italy as well)
- Setting up ombudspersons to independently monitor the implementation of the law and to ensure anonymity for complaints, inter alia (Spain and Germany)
- Modifying the turnover requirement so that the transposition law can cover larger actors (Germany, -preliminary- Belgium and Spain)
- Banning double race auctions (possibly Italy)
- Setting obligation to have written contracts for all operations (Spain)
- Setting a revision process in 2 years (instead of 4 as indicated in Directive) (Germany)
In its opinion, the EESC highlights the need to ensure that transnational operations are also effectively protected by the Directive and its transposition laws. Ensuring that non-EU actors have the right tools and information will require specific action from the EU and its Members States.
The opinion also identifies gaps on the Directive, such as the ‘step approach’ which implies that a supplier who has a large turnover but a ‘de facto’ weaker position would not be able to complain; or the fact that some UTPs that are now considered as ‘grey UTPs’ (ie. accepted only under certain conditions) should be prohibited altogether.
While the deadline to transpose the Directive expired in May 2021, several Member States have still not notified its transposition to the Commission. Consequently, the Commission issued letters of formal notice to 12 Member States in July 2021. This opinion is expected to accelerate the transposition process and to push for an ambitious and effective implementation.
Read the full opinion here
Further reading on our work on Unfair Trading Practices can be found here.