The European Union (EU) has adopted broad legislation intended to minimise the impact of unfair trading practices among business-to-business participants in the agricultural and food supply chain.
Published at the end of April in the Official Journal of the European Union, Directive (EU) 2019/633 expressly prohibits a number of business practices between buyers and suppliers. Specific practice issues addressed in the Directive include buyer/supplier contracts and agreements, payments, order cancellations, refunds, charge-backs to suppliers, and acts of commercial retaliation.
The origins of the Directive date back to 2011, when the European Commission’s High-Level Forum for a Better Functioning Food Supply Chain put forth a set of principles of good practices among participants in the food supply chain. Subsequently, the European Parliament invited the Commission to develop and submit a proposal for a Union-wide legal framework to address unfair trade practices, supported by a request from the European Council that the Commission also undertake an impact assessment of unfair trade practices.
EU Member States have until 1 May 2021 to adopt and publish national laws and regulations implementing the essential requirements of the new Directive in their respective countries. These measures must take effect not later than 1 November 2021.
The text of the EU’s Directive on unfair trading practices in the agricultural and food supply chain as published in the Official Journal is available here.