BRUSSELS, BELGIUM — The European Parliament voted March 12 on a new set of E.U. rules that will help protect European farmers as well as small and mid-range suppliers against unfair trading practices in the food supply chain.
“Today's vote is fundamentally about fairness for farmers in the food supply chain,” said Phil Hogan, European Commission commissioner following the vote. “The Commission tabled this proposal in April 2018 to ensure that farmers are treated fairly by parties throughout the food supply chain, and to provide this minimum protection all across the E.U. This law is one of the key proposals of the Agricultural Markets Taskforce. Today's vote demonstrates our ability to deliver for E.U. citizens.”
The new European law builds on a proposal tabled by the European Commission and will cover agricultural and food products traded in the food supply chain, banning for the first time up to 16 unfair trading practices imposed unilaterally by one trading partner on another.
A recent E.U.-wide opinion poll published in February 2018 shows that 88% of respondents consider strengthening farmers' role in the food supply chain important. Ninety-six percent of the respondents to the 2017 public consultation on the modernization of the CAP agreed with the proposition that improving farmers' position in the value chain, including addressing UTPs, should be an objective of the E.U.'s Common Agricultural Policy (CAP).
“The rules voted will apply to anyone involved in the food supply chain with a turnover of €350 million with differentiated levels of protection provided below that threshold,” the European Commission said. “The new rules will cover retailers, food processors, wholesalers, cooperatives or producers' organizations, or a single producer who would be engaging in any of the unfair trade practices identified.”
The new framework grants member states the authority to enforce the new rules and impose sanctions in case of established infringements. The commission will also set up a coordination mechanism between enforcement authorities to enable the exchange of best practices.
The unfair trading practices to be banned include: late payments for perishable food products; last minute order cancellations; unilateral or retroactive changes to contracts; forcing the supplier to pay for wasted products and refusing written contracts.
The European Commission has been working toward a fairer and more balanced food supply chain since the beginning of its mandate. In 2016 the Commission set up the Agricultural Markets Task Force (AMTF) to assess the role of farmers in the wider food supply chain and make recommendations on how it can be strengthened. On the basis of these recommendations, the Commission launched an inception impact assessment and a public consultation on the improvement of the food supply chain in 2017, which in turn helped identify the specific unfair trading practices to which operators are frequently exposed.
Member states are now expected to formally endorse the new rules before they can are enacted.