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Monday 25 March 2019

Unfair Trading Practices Directive formally adopted by the EU

The Directive bans 16 specific practices listed as unfair, including the sharing or misuse of confidential information relating to the supply agreement.
The Directive bans 16 specific practices listed as unfair, including the sharing or misuse of confidential information relating to the supply agreement.
Claire Fox

Claire Fox

The Unfair Trading Practices Directive has been formally adopted by the European Parliament today.

It was adopted 589 votes in favour, 72 against and 9 abstentions.

MEP and Vice President of the EU Parliament Mairead McGuinness said that the passing of the legislation is a stepping stone in correcting power imbalances in the food supply chain and it comes at a critical time when sustainability, environmental issues and climate action are on the agenda.

"It’s a hugely significant piece of legislation which for the first time curtails the capacity of the powerful to squeeze the less powerful in the food supply chain," Ms McGuinness stated.

“Member states can go beyond what is contained in this Directive, which protects suppliers with a turnover of up to €350 million, against buyers with a turnover above €2 million. This means that a supplier can lodge a complaint with an enforcement authority in their own Member State or in the Member State in which the buyer is located if they believe that they are a victim of a UTP.

“The Competition and Consumer Protection Commission (CCPC) oversees the Grocery Goods Regulations 2016 in Ireland. They have raised concerns about its ability to implement and enforce this Directive."

The CCPC has called for a separate regulator. Work is ongoing between the two responsible departments - the Department of Agriculture and the Department of Business, Enterprise and Innovation to find a way forward.

The Directive bans 16 specific practices listed as unfair, including the sharing or misuse of confidential information relating to the supply agreement.

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It also guards against suppliers being penalised for filing a complaint.

“The actions of buyers in third countries is important to ensure that the rules are not circumvented by buyers establishing themselves outside the EU," added Ms McGuinness.

"This Directive should result in rebalancing the food chain and ensue that the issue of public goods are rewarded in the food chain at a time when there is increased emphasis on sustainability."

The Directive has to be transposed into Irish law within 24 months, with a review to take place four years after that.

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