15 April 2019

Provisional legislative proposal on unfair trading practices

1 April last Carola Schouten, Minister of Agriculture, Nature and Food Quality, informed the Lower House through a Letter of Parliament of the provisional political agreement on unfair trading practices (UTP) in the relationships between undertakings in the food supply chain.

During the negotiations the number of UTP that will be prohibited arrived at sixteen. This includes unreasonably late payments; the cancellation at short notice of orders for perishable food products; the unilateral change of important contractual conditions and that the commodity producers must pay for decay of food and agricultural products after delivery taking place through no fault of the supplier.
Other UTP that may be prohibited include that suppliers cannot be deprived of a written agreement; claiming payment for services that were not supplied; buyers who share confidential information with third parties; buyers cannot threaten with reprisals and buyers cannot claim money for the handling of complaints.

In addition, some trading practices are only permitted after clear and unambiguous arrangements in the sale and purchase agreement: the return of unsold agricultural food products; the passing on of costs to the supplier of agricultural food products for storage, promotions, marketing and other specific activities. If so required, the buyer must be able to provide a substantiation for the aforementioned costs. It was added to this that a buyer can only charge costs for the use of employees to promote the products after express arrangements.

In the Letter to Parliament Minister Schouten indicates that the legislative proposal is not definitive yet. Both the European Council and the European Parliament must still approve the proposal, the directive can then be published. It is expected that the publication will take place in May.

You can find the entire Letter to Parliament here: Letter to Parliament regarding appreciation of the European Directive on unfair trading practices in the food supply chain


Florianne Seldenrust
Florianne Seldenrust

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