As it announced (see EUROPE 11839), the European Commission is to present proposals to tackle unfair trade practices in the food supply chain. These proposals will take the form of a directive, leaving member states considerable flexibility.
The 37-page draft directive, which is currently going through inter-service evaluation within the Commission, is likely to be presented on Wednesday 11 April. The College of Commissioners’ agenda for that day also includes adoption of the proposal on improving the food chain, along with initiatives on transparency and risk assessment procedures in general food legislation and the presentation of a new pact for consumers.
The draft directive that seeks to improve the functioning of the food chain is likely to propose a ban on a short list of trade practices that are felt to be unfair between supplier SMEs (including agricultural producer organisations) and purchasers which are not SMEs, and a ban on others unless they are stated in a “clear and unambiguous” contract between the parties.
Twenty member states have already taken action domestically to tackle such practices. The Commission does not wish to do anything to threaten these measures but would like to see harmonisation of the rules on a number of points while leaving member states wide room for manoeuvre.
Once this legislative harmonisation comes into force, a ban will be placed on payments beyond 30 days and late cancellation of orders involving perishable products and, generally, any unilateral retrospective alteration to terms of contract, and payment by suppliers for losses that are not the result of their actions. Other practices that the Commission wants to ban, unless they are included in the contract, are: - the return of unsold goods to the supplier; - payment by the supplier of a guarantee of supply; - promotion or marketing expenses. In addition, in the event of a dispute, national authorities will be able to protect the identity of the complainant.
National rules that go beyond the minimum standards of protection provided for in the directive will still be able to be applied. Unlike a regulation, a directive is not directly applicable in EU countries. It must first be transposed into national law before it can be used by governments, businesses and individuals. Generally, the time allowed for transposition does not exceed two years.
In December 2016, the Council adopted conclusions on strengthening the position of farmers in the food supply chain and tackling unfair trade practices but, unable to find a compromise, without calling for a binding legislative framework (see EUROPE 11687).
Parliament showed greater firmness in a resolution adopted in June 2016 (see EUROPE 11435) calling on the European Commission to adopt framework legislation in this area. (Original version in French)