Unfair Trading Practices in the Agri-food Supply Chain

Today’s dizzyingly complex and highly globalised supply chains are dominated by retailers and large traders with immense buying power, leaving small suppliers with very little leverage. This imbalance forces producers into difficult choices: to accept poor and unpredictable terms or risk losing their livelihoods. For many communities without financial safety nets, this often results in having to accept exploitative working conditions without other viable alternatives.

The Fair Trade Movement, civil society and allies advocated for the need for specific legislation to address these imbalances. These efforts culminated in February 2019 with the adoption of the EU Unfair Trading Practices (UTP) Directive, which aims to reduce inequalities in global supply chains by ensuring a minimum level of protection for agricultural and food suppliers when they have contractual relationships with buyers.

Our View

At FTAO, we see the UTP directive as a big accomplishment in itself, as it is perhaps the most sophisticated legal instrument in the world for eradicating unfair trading practices in the agri-food sector on a global level. By laying out a very clear list of forbidden ‘unfair’ practices, this directive offers a very simple and ready-to-use framework for victims of UTPs to file complaints against abusive buyers.

The FTAO’s biggest achievement in the negotiating phase of this directive was to include non-EU-based actors in the directive. However, to date, these non-EU actors have made virtually zero complaints and have therefore not truly benefited from the potential this directive offers them. Fast forward five years after the directive entered into force, and the reality has not changed: still no third-country complaints. As the directive currently undergoes Evolution, the FTAO is continuing to fight for meaningful ways to ensure that this directive also benefits third-country suppliers to the EU market, and not simply EU-based entities.