EU set to clamp down on 'unfair' agri retail practices

The laws will also now cover trade of agricultural products and ancillary services, on top of foodstuffs.
The laws will also now cover trade of agricultural products and ancillary services, on top of foodstuffs.

Sarah Collins

Talks are intensifying on a law to ban the “unfair” treatment of farmers by supermarket giants.

Despite heated debates and intense lobbying by the retail sector, EU negotiators hope to have the law agreed by Christmas.

MEPs are counting on it being a vote-winner ahead of the European elections next May, as it bans practices including late payments, last-minute cancellations and retroactive contract changes.

Agriculture MEPs voted through amendments to the draft law last month that would extend the rules to all suppliers and buyers, regardless of size, and to agricultural products other than food.

They also added to the list of unfair trading practices (UTPs) by including a 60-day payment deadline for orders of non-perishable goods, a 60-day notice period for cancelling an order of perishable goods and a ban on below-cost sales by retailers, unless agreed in advance.

The European Commission’s original proposal — which is supported by EU governments — limits the rules to small suppliers selling to large buyers, leaving out other players in the food supply chain.

The idea is for all EU countries to apply a set of minimum standards, leaving individual countries to bring in stricter rules if they want.

There are 20 member states that have rules on unfair trading practices, including the UK, where a groceries code adjudicator hears complaints by suppliers and retailers over unfair contract terms.

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Under the draft law, EU countries would set up a watchdog that can impose sanctions on producers or retailers that break the rules.

Parliament’s lead negotiator on the draft, Italian socialist MEP Paolo De Castro, said he and his colleagues had been put under pressure by the supermarket lobby to kill the legislation.

Farmers’ representatives staged a protest in Strasbourg last month in support of the legislation.

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