Brussels, 05/02/2016 (Agence Europe) - In light of the positive developments in parts of the food chain and since different approaches could address unfair trading practices (UTPs) effectively, the Commission “does not see the added value of a specific harmonised regulatory approach at EU level at this stage”, it says in a report published at the end of January on unfair business-to-business practices in the food supply chain.
The European Parliament and the EU agricultural organisations take a different view and believe the Commission should act and propose legislation to combat UTPs.
The Commission says the fact that the large majority of member states have introduced regulatory measures and public enforcement systems “is a very important development”. Some member states have gone further than others, but almost all the legislative enforcement systems introduced “go beyond the normal judicial redress through courts, thereby addressing the 'fear factor' of the potential victims of UTPs”. Consequently, the Commission sees no need to propose Community regulation.
It acknowledges that, since in many member states legislation was introduced only very recently, “results must be closely monitored, and reassessed, if necessary”. Belgium and the Netherlands do not have a regulatory framework, but have opted for a national voluntary platform. The few remaining member states without UTP legislation “could benefit from following their example and considering at least a national voluntary platform”, states the Commission report.
Differences from country to country. The actual number of investigations into alleged unfair trading practices differs significantly across the member states. Around a third of member states with public enforcement had no cases in the last few years (these include Austria, Bulgaria, Finland, Croatia and Romania). Another third (including Germany, Ireland and the United Kingdom) investigated only a few cases, while the remaining third (which includes the Czech Republic, France, Hungary, Italy, Portugal and Spain) dealt with dozens or even more. To some extent, this could be attributed to the different salience of the problem in the different member states, the report suggests.
Fines/penalties. Most member states have introduced fines for companies applying UTPs in breach of national law. In most, there is a maximum level of fines in absolute terms, but in some member states, fines are calculated as a percentage of the annual turnover of the company that applied UTPs against its weaker business partner. The range goes from 0.05 % in one case up to 10 % of turnover in several other member states. A penalty may also be to “name and shame”, for example by publishing the name of the company that was found guilty. In order to act as a real deterrent, penalties should be high enough to outweigh any gain from imposing the UTP (although this can be difficult to quantify) and to influence behaviour at company level, the Commission says. Penalties should also be “proportionate to the gravity of the conduct and its potential harm to the victim(s)”, it stresses.
Copa-Cogeca regrets. The agricultural organisations Copa-Cogeca regret that the Commission did not propose new EU legislation to tackle unfair trading practices in the food supply chain. They do, however, welcome the fact that weaknesses in the supply chain initiative (SCI) have been recognised.
Copa-Cogeca Secretary General Pekka Pesonen argued for legislation combined with voluntary agreements and backed up by strong, independent third party enforcement. That 20 member states have or are about to introduce national legislation in this area “demonstrates to us that the problem of UTPs is an EU wide problem that needs an EU wide solution”, he stated. He said that his organisations believe ultimately that legislation is needed to provide a level playing field to minimise EU market fragmentation and distortions of competition.
He said it was welcome news that, in its report, the Commission recognises the weaknesses of the SCI and calls for them to be dealt with. He also welcomes the Commission's indication that the SCI should grant investigatory and sanctioning powers to an independent body.
Discussion on this matter will continue in the High-Level Forum for a Better Functioning Food Supply Chain. (Original version in French by Lionel Changeur)