REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on unfair business-to-business trading practices in the food supply chain
Date: 2016-01-29
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU Member State, agri-foodstuffs, chain store, consumer protection, food industry, national law, restriction on competition, supplier, unfair terms of contract

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 29.1.2016  COM(2016) 32 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on unfair business-to-business trading practices in the food supply chain  
 
 
1. 

INTRODUCTION 

In July 2014, the Commission adopted a Communication on tackling unfair trading practices 
(UTPs) in the business-to-business food supply chain.1 UTPs are practices that deviate grossly 
from good commercial conduct, are contrary to good faith and fair dealing and are unilaterally 
imposed  by  one  trading  partner  on  another.  The  Communication  explained  why  the  market 
structure of the food supply chain makes it particularly vulnerable to UTPs and described the 
damage that UTPs can do to operators with low bargaining power. To address the problem of 
UTPs,  the  Communication  encouraged  operators  in  the  European  food  supply  chain  to 
participate in voluntary schemes  aimed at promoting best practices and reducing UTPs, and 
emphasised the importance of effective and independent enforcement at national level.  

In  2015,  the  discussion  intensified,  not  least  because  of  the  difficulties  faced  by  European 
farmers  caused  by  falling  prices  for  certain  agricultural  commodities,  in  particular  dairy 
products and pigmeat. Demand for a number of products weakened significantly, and this was 
aggravated  by  the  Russian  import  ban  on  agricultural  products.  At  the  same  time,  world 
production increased, leading to  a general  oversupply.  While UTPs are  not  the cause of the 
recent  price  declines,  the  low  prices  have  made  farmers  more  vulnerable  to  potential  unfair 
behaviour  by  their  trading  partners.  In  response  to  the  challenges  faced  by  farmers,  the 
Ministers of Agriculture of seven countries2 issued a joint statement asking the Commission 
to take its analysis on UTPs further and propose EU legislation to address UTPs. 

The Commission responded to the farming  crisis with a package  of wide-ranging  measures. 
Many of these target the dairy sector, which is particularly affected by the drop in prices. This 
report  will  not  cover  the  UTP-specific  measures  already  adopted  for  particular  sectors.  An 
Agricultural Markets Task Force will be set up to advise the Commission on specific aspects 
of  the  functioning  of  the  agricultural  markets  and  the  farmers'  position  in  the  food  chain.  It 
will also make recommendations and propose relevant policy initiatives in this field.  

This  report  concentrates  on  the  existing  frameworks  for  tackling  UTPs.  It  has  two  main 
elements:  (1)  an  assessment  of  the  existing  regulatory  and  enforcement  frameworks  in  the 
Member States; and (2) an assessment of the impact of the voluntary EU-wide Supply Chain 
Initiative (SCI) and the national SCI platforms that have been set up. 

This  report concludes that measures to  combat UTPs have  developed significantly in  recent 
years.  Many  Member  States,  especially  those  where  the  issue  is  more  prominent,  have 
recently  introduced  legislative  and  enforcement  measures  that  broadly  meet  the  criteria  for 
effective  frameworks  against  UTPs.  In  total,  more  than  20  Member  States  have  introduced 
legislation or are planning to do so in the near future. While it is too early to assess the overall 
impact  of  this  legislation,  this  report  identifies  a  number  of  specific  areas  where  there  is 
further  room  for  improvement.  Regarding  the  voluntary  Supply  Chain  Initiative,  the  report 

1 COM(2014)472 final 
2 Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia 

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acknowledges  the  benefits  achieved  so  far,  but  also  suggests  a  number  of  possible 
enhancement measures to increase the credibility and effectiveness of the initiative. 

REGULATORY AND ENFORCEMENT FRAMEWORKS IN MEMBER STATES 

2. 
There is no EU legislation targeting business-to-business UTPs across the food supply chain.3 
EU competition law addresses abuses of a dominant position and anti-competitive practices, 
but  most  reported  UTPs  do  not  fall  under  competition  law,  because  most  actors  are  in  a 
strong, but not dominant position. Some Member States have extended the application of the 
EU  consumer  protection  legislation  to  business-to-business  situations.4  This  concerns 
Directive 2005/29/EC on unfair commercial practices or Directive 93/13/EEC on unfair terms 
in consumer contracts. However, the practices addressed in the Directive are mostly different 
than the ones discussed in this report.  

The situation is  different at national level  where most  Member States have  addressed UTPs 
using  a  variety  of  approaches,  most  of  them  regulatory,  and  some  based  on  self-regulatory 
initiatives  among  market  participants.  In  regulatory  terms,  the  last  few  years  have  been  a 
period  of  considerable  change.  More  specifically,  out  of  the  20  Member  States  that  already 
have  legislation5,  15  have  introduced  it  in  the  last  5  years6.  A  few  more  may  consider 
legislation  in  the  near  future7  and  some  of  the  Member  States  have  enhanced  their  older 
frameworks in the last 5 years8. The figure below gives an overview of the current situation. 

3 Specific EU-wide rules on certain parts of the food chain have been introduced under the Common Agricultural 
Policy  (CAP),  including,  inter  alia,  the  possibility  for  Member  States  to  require  compulsory  written  contracts 
between  farmers  and  processors  or  distributors  with  possible  obligation  for  first  purchasers  to  offer  farmers 
minimum  contract  duration.  Furthermore,  the  reformed  CAP  and  Common  Fisheries  Policy  strengthen  the 
position of producers in the supply chain vis-à-vis downstream operators, notably by supporting the creation and 
development  of  producer  organisations.  The  new  Common  Market  Organisation  also  includes  elements  which 
aim at reducing the bargaining power gap between farmers and other parties in the food supply chain in some 
selected sectors (milk, olive oil, beef and veal, arable crops). In November 2015, the Commission published a set 
of guidelines to help market operators apply the new rules.  
4 For example in Austria, Denmark, France, Germany, Italy and Sweden.  
5 AT, BG, CY, CZ, DE, EL, ES, FI, FR, HR, HU, IE, IT, LT, LV, PT, RO, SI, SK, UK 
6 BG, CY, CZ, ES, FI, HU, IE, IT, LT, LV, PT, RO, SI, SK, UK 
7 For example, Poland 
8 DE, EL, FR 

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In  2015,  the  Commission  organised  several  meetings  with  Member  States'  ministries  and 
enforcement authorities, to gather detailed information on the existing or planned regulatory 
frameworks. The fact-finding process was supported by bilateral follow-up discussions.  

Five key elements are important for effective regulatory frameworks to address UTPs. These 
are  described  in  the  sections  below.  Member  States  may  address  these  five  elements 
differently,  but  the  different  approaches  do  not  seem  to  have  negative  consequences for  the 
single  market9.  Notwithstanding  the  overall  assessment  of  the  regulatory  frameworks  at 
national level which is satisfactory, the analysis below suggests where certain Member States 
could further enhance their regulatory framework and identifies opportunities for cooperation 
between Member States. 

1) Coverage in the supply chain 

Measures against UTPs address practices resulting mainly from economic imbalances. Most 
Member States have defined clear criteria to identify situations conducive to UTPs. The laws 
in the majority of the Member States apply to business–to-business (B2B) relationships in all 
stages  of  the  supply  chain.  Some  Member  States  apply  legislation  only  to  relationships  in 
which one party is a retailer.10  

9 Generally, national regulatory frameworks apply also to cross-border relations.  
10 FI, HU, LT, LV, RO, UK 

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Looking  ahead,  given  that  UTPs  can  potentially  occur  at  every  stage  of  the  chain,  Member 
States that have not yet done so should consider introducing legislation that covers the entire 
B2B food supply chain. This is important in order to ensure that all smaller market operators 
have  adequate  protection  from  UTPs,  as  many  small  market  operators  do  not  deal  directly 
with retailers. Member States should also ensure that their legislation covers operators from 
non-EU countries (for example, primary producers from Africa or Latin America). 

2) Core types of UTPs 

Member States with UTP legislation defined the unfair practices to be tackled based on their 
analysis of the market situation and practices in their country.  

The analysis preceding this report11 identified four  key  categories  of UTPs  that an effective 
regulatory framework should target: 

-  one party should not unduly or unfairly shift its own costs or entrepreneurial risks to 

the other party; 

-  one party should not ask the other party for advantages or benefits of any kind without 

performing a service related to the advantage or benefit asked; 

-  one party should  not make unilateral and/or  retroactive changes  to a contract, unless 

- 

the contract specifically allows for it under fair conditions; 
there should be no unfair termination of a contractual relationship or unjustified threat 
of termination of a contractual relationship. 

Although  Member  States  have  chosen  different  legislative  approaches  and  techniques, 
according  to their legal  traditions, the above  core types of  UTPs are broadly  covered by all 
regulatory frameworks.12 

To  improve  the  common  understanding  between  Member  States  regarding  which  specific 
types  of  business  practice  should  be  considered  UTPs,  Member  States  should  exchange 
information  and  best  practices  concerning  their  national  legislation  and  experience  of 
enforcement in a coordinated and systematic way. 

3) Flexibility vs rigidity in defining UTPs 

Member States have chosen different legislative approaches to addressing abuses of economic 
imbalances.  Some  Member  States,  for  example  Germany  and  Austria,  have  general  legal 
provisions requiring an assessment on a case-by-case basis13 of whether there is a significant 
economic  imbalance  between  two  operators,  and  whether  the  stronger  operator  abused  its 
position to impose unfair terms or conditions on the weaker party.  

Other Member States, for example the Czech Republic, Slovakia and Hungary, have chosen 
to  introduce more detailed UTP-specific  legislation. Several of these laws contain extensive 

11 For example, the Commission's Green Paper on UTPs and its ensuing public stakeholder consultation. 
12  The  core  UTPs  are  also  consistent  with  the  principles  established  in  the  High  Level  Forum  on  a  Better 
Functioning Food Supply Chain and the implementation framework of the Supply Chain Initiative. 
13 This could be in the context of a complaint or an own-initiative investigation. 

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lists of practices considered to be intrinsically unfair and thus illegal (blacklists), and where 
unfairness is not assessed on a case-by-case basis. 

A  potential  advantage  of  the  first,  more  general,  approach  is  its  flexibility  and  that  it  can 
capture imbalances throughout the supply chain, and different types of existing, or even newly 
created, UTPs. However, the general approach requires a very comprehensive assessment of 
both  the  economic  and  contractual  circumstances  in  each  individual  case.  As  recent 
developments  in Germany show, such general legislation can be rather difficult for national 
enforcement authorities to apply.14 

The  advantage  of  the  second  approach,  i.e.  more  detailed  UTP-specific  legislation,  is  that 
enforcing it does not require comprehensive and resource-intensive factual investigations and 
legal assessments in every individual case. However, it may sometimes be difficult under this 
approach  to  take  due  account  of  the  economic  and  contractual  context  of  a  single  clause  or 
practice, and this could raise concerns of proportionality.  

Member States having chosen a general approach should ensure their laws can be applied in 
practice,  impose  manageable  evidence  requirements,  and  allocate  sufficient  resources  to 
enforcement activities to ensure comprehensive and effective case-by-case assessments. 

Member  States  with  a  UTP-specific  approach  should  consider  carefully  whether  their 
measures  are  proportionate,  and  the  range  and  nature  of  the  practices  covered  by  their 
legislation.  To  ensure  the  UTP-specific  approach  remains  proportionate  Member  States 
should: i) limit the UTPs that are intrinsically prohibited to certain core categories described 
in  the  previous  section,  and  ii)  assess  other  potentially  unfair  practices  based  on  the 
contractual and economic background of the individual case. 

4) Confidentiality of complaints and the possibility of own-initiative investigations 

An effective enforcement system needs to address the weaker party’s fear of compromising its 
commercial relationship when complaining openly to authorities about UTPs. This so-called 
"fear factor" can easily obstruct authorities from penalising market operators imposing UTPs 
because authorities require sufficient information to be able to follow up on a complaint. 

Many  Member  States  allow  confidential  formal  complaints  where  the  identity  of  the 
complainant  is  protected.  Several  allow  aggregated  complaints  which  better  protect  the 
identity of the complainant, or permit any interested party to lodge a complaint. This means 
that  complainants  do  not  need  to  act  in  person  but  can,  for  example,  be  represented  by  an 
association. 

Member  States  have  appointed  different  national  enforcement  authorities  to  address  UTPs. 
This is sometimes the national competition authority and in other cases a dedicated body, such 
as  a  national  ministry,  a  national  food  agency,  or  a  national  anti-fraud  agency.    These 

14  In  a  recent  case  concerning  practices  of  leading  German  retailer  EDEKA,  a  German  regional  court  did  not 
confirm the decision of the German competition authority of 3 July 2014 and its interpretation of the national 
legislation regarding UTPs. 

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authorities have the power to launch own-initiative investigations whenever there is sufficient 
indication that a company has been using UTPs prohibited under national legislation. 

Own-initiative  investigations  launched  by  the  enforcement  authority  are  another  important 
element in addressing the fear factor. They enable the victim of an unfair practice to inform 
the  authority  about  alleged  UTPs  imposed  by  a  stronger  party,  thereby  triggering  an  own-
initiative investigation if the enforcement authority believes that there are sufficient grounds. 

Practically all Member States' enforcement systems allow confidential complaints and own-
initiative investigations in order to address the fear factor. 

Member States’ enforcement authorities should coordinate and exchange information and best 
practice on a regular basis in order to further improve the enforcement of measures to combat 
UTPs and to better address potential cross-border UTPs. 

5) Deterrent effect 

Measures to tackle UTPs must act as a real deterrent. Just how much of a deterrent they are is 
determined  by  the  likelihood  of  unfair  practices  being  investigated  by  an  enforcement 
authority, and the level of the potential penalties or fines. 

Intensity of enforcement practice 
The actual number of investigations into alleged unfair trading practices differs significantly 
across  Member  States.  Around  a  third  of  Member  States  with  public  enforcement  had  no 
cases in the last few years15; another third just investigated a few cases16; and the remaining 
third  dealt  with  dozens  or  even  more17.  To  some  extent,  this  could  be  attributed  to  the 
different salience of the problem in the different Member States. 

Differences  in  the  approach  taken  to  enforcing  anti-UTP  measures  also  matter:  some 
enforcement  authorities  focus  on  resolving  those  conflicts  with  an  effect  at  market  level, 
while others try to resolve individual disputes. Thus, simply comparing the yearly number of 
investigations would not give an accurate picture of how effective the enforcement system is. 
Even one highly publicised comprehensive investigation at market level can act as a deterrent. 
Nevertheless, Member States without any recent cases should review their national situation. 

Fines and other 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. 

15 AT, BG, FI, HR, LV, RO, SI, 
16 CY, DE, IE, LT, UK 
17 CZ, ES, FR, HU, IT, PT, SK 

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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. But they should also be proportionate 
to the gravity of the conduct and its potential harm to the victim(s).  

3. 

THE VOLUNTARY SUPPLY CHAIN INITIATIVE AND ITS NATIONAL PLATFORMS 

3.1. 

Background 

The Supply Chain Initiative (SCI) was developed within the framework of the Commission’s 
High Level Forum for a Better Functioning Food Supply Chain.18 The aim of the initiative is 
to  increase  fairness  in  commercial  relations  along  the  food  supply  chain.  To  this  end,  all 
market  representatives  involved  in  the  Forum’s  working  party  on  UTPs,  including  farmers' 
representatives, jointly agreed on a set of principles of good practice in vertical relationships 
in the food supply chain19 in November 2011. However, in spite of significant efforts by all 
stakeholders,  those  involved  in  the  food  chain  could  not  agree  on  a  voluntary  enforcement 
mechanism, as farmers and meat processors felt it did not address complainant confidentiality 
(the fear factor) and sanctions. 

The  SCI,  a  voluntary  framework  for  implementing  the  principles  of  good  practice  was 
launched in September 2013.20 Individual companies may join the SCI once they comply with 
the principles of good practice. Under the SCI, disputes between operators can be addressed 
through mediation or arbitration. The SCI focuses on organisational requirements at company 
level  to  prevent  UTPs,  including  staff  training  and  participation  in  dispute  resolution 
mechanisms.  Breaches  of  these  organisational  requirements  can  lead  to  the  concerned 
company being excluded from the SCI. However, the SCI does not provide for any other type 
of  sanction.  Members  of  the  SCI  must  ensure  that  the  weaker  parties  using  the  dispute 
resolution mechanisms are not subject to commercial retaliation. 

The SCI is managed by a Governance Group representing retailers and suppliers in the food 
supply chain. Farmers' representatives decided not to join the SCI since in their view it does 
not  ensure  sufficient  confidentiality  for  complaining  parties  and  does  not  provide  for 
independent investigations and sanctions.  

To  date,  a  little  more  than  two  years  after  the  launch  of  the  SCI,  328  retail,  wholesale  and 
manufacturing groups and companies have registered, representing 1155 operating companies 
across  all  EU  Member  States.  National  platforms  of  the  SCI  have  been  established  or  are 
emerging  in  Belgium,  Finland,  Germany  and  the  Netherlands  (more  details  on  national 
initiatives under 3.2.3). 

18 http://ec.europa.eu/growth/sectors/food/competitiveness/supply-chain-forum/index_en.htm. 
19 http://www.supplychaininitiative.eu/about-initiative/principles-good-practice-vertical-relationships-food-supply-chain. 
20 http://www.supplychaininitiative.eu. 

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3.2. 

Assessment of the impact of voluntary initiatives 

The Commission contracted an external research company to assess the SCI and its national 
platforms. The study it produced was based mainly on a survey among market operators in the 
food  supply  chain.  The survey  yielded  more  than  1  000  responses,  both  from  members  and 
non-members of the SCI and its national platforms. The study found that it was still very early 
to assess the full impact of the initiatives as they have only been set up in the last 2-3 years, 
with the exception of the Belgian initiative which dates from 2010. The following sections of 
this report take into account the main findings of the study. 

3.2.1.  Assessment of the SCI 

Participation  in  the  SCI  has  increased  significantly  in  the  two  years  since  it  was  set  up. 
However, SMEs, and farmers in particular, are still clearly under-represented. To some extent 
this  may  be  caused  by  the  limited  awareness  of  the  SCI  in  all  Member  States,  especially 
among  farmers  and  SMEs.  As  described  above,  low  awareness  among  farmers  may  result 
from a lack of support of the initiative from farmer representatives who are concerned about a 
lack  of  confidentiality  and  independence  within  the  initiative.  The  survey  among  market 
operators revealed a stark contrast in awareness of the SCI21: only 11 % of farmers and 15 % 
of  wholesalers  who  responded  had  heard  of  the  SCI  while  48  %  of  retailers  had.  Similarly, 
awareness is much lower in SMEs (13 %) than in large companies (43 %). The costs incurred 
by SMEs to join the SCI are limited and do not appear to prevent them joining.  

The overall level of trust in the SCI is high among companies who are aware of it.  72 % of 
survey respondents who know about the SCI say that they have a fairly high or very high level 
of trust in it. However, trust is lower in the farming, manufacturing and wholesale sectors (63 
%) than in the retail sector (96 %). Some external stakeholders expressed doubts, in particular 
regarding the governance structure of the SCI. The fact that the members of the Governance 
Group represent stakeholder groups may be seen as restricting their impartiality. 

The transparency of the SCI is generally appreciated by operators aware of the initiative and 
especially  by  its  members.  This  pertains  to  information  on  the  process  and  requirements  to 
join  the  initiative,  the  rules  of  procedure  and  the  evolution  of  the  member  base.  Generally, 
information  is  clearly  and  effectively  presented  on  the  SCI’s  website.  The  SCI's  internal 
monitoring system is based mainly on annual member surveys. While this approach is cost-
effective  it does  not  provide  for  spot  checks  or  allow  the  actual implementation  of  member 
companies’  commitments  to  the  process  to  be  monitored  in  a  systematic  way.  Furthermore, 
information  on  bilateral  disputes  and  how  they  were  resolved  under  the  SCI  is  based  on 
survey responses and may therefore be incomplete. 

The  survey  confirmed  that  UTPs  can  occur  at  any  point  in  the  food  supply  chain.  It  also 
showed  that  parties  who  say  they  are  subject  to  UTPs  often  do  not  launch  judicial 
proceedings,  or  attempt  arbitration  or  mediation  for  fear  of  compromising  their  commercial 

21 

Members  of  the  SCI  were  over-represented  in  the  survey.  That  implies  that  the  awareness  figures 
presented here overestimate the actual level of awareness of the SCI among market players. 

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relationship  with  the  stronger  trading  party.  On  this  basis,  the  external  study  identified  the 
following strengths and weaknesses regarding the SCI's effectiveness in tackling UTPs: 

Strengths: 

o  The SCI promotes cultural change concerning UTPs in the food supply chain. 

o  The dispute resolution options promoted by the SCI generally offer a faster and 

cheaper alternative to any judicial action. 

o  The SCI is an EU-wide initiative and could therefore facilitate the resolution of 

unfair practices with a cross-border dimension. 

Weaknesses: 

o  In the eyes of a number of operators, the SCI lacks effective deterrents against 

UTPs. 

o  The  SCI  does  not  allow  for  individual  confidential  complaints  by  potential 
victims of UTPs or for own-initiative investigations by an independent body. 

o  Use of the available dispute resolution options has only been limited in the first 

two years of the SCI.22 

The survey  provided additional information  on the experiences of economic operators since 
the  launch  of  the  SCI.  73  %  of  the  survey  respondents  affirm  that  the  situation  concerning 
UTPs has not significantly changed since 2013. However, this percentage also includes those 
respondents that declared they had not been subject to UTPs at all in the last five years (53 % 
of all respondents). The majority of respondents saying they had experienced UTPs in the past 
five  years  felt  the  situation  has  improved  (21  %)  rather  than  worsened  (6  %).  The  share  of 
respondents who feel that the situation has improved is higher in the retail sector and lower 
among  farmers,  but  in  all  sectors  more  respondents  think  the  situation  has  improved  than 
think  it  has  worsened.  Across  all  sectors,  SCI  members  are  significantly  more  likely  to  say 
that the situation has improved (56 %) than non-members (15 %). 

In conclusion, there are first indications that the SCI has started to promote cultural change in 
the food supply chain, thereby potentially increasing fairness in commercial relation. It is still 
too early to make a robust assessment on whether the SCI has been effective in addressing or 
reduced  UTPs.  Nevertheless,  the  analysis  identified  a  number  of  possible  enhancements  for 
the initiative that are described in the following section. 

3.2.2.  How to improve the SCI 

On the basis of the findings above and previous work in the High Level Forum for a Better 
Functioning  Food  Supply  Chain,  the  Commission  suggests  opening  a  dialogue  with  the 
relevant  stakeholders  on  ways  to  improve  the  SCI  and  extent  its  participation  to  the  entire 
food chain (including primary producers). The following actions should be taken: 

o  Step up efforts to publicise the SCI, especially among SMEs. 

22  In  the  SCI's  first  annual  survey,  only  one  lodged  complaint  and  39  received  complaints  (by  6  different 
companies) were reported. In the second annual survey, three lodged complaints and 39 received complaints (by 
8 different companies) were reported. 

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o  Ensure the impartiality of the governance structure, for instance by establishing 

an independent chair who is not affiliated to specific stakeholder groups. 

o  Allow  alleged  victims  of  UTPs  to  complain  confidentially.  Nominate  an 

independent body with power to investigate and impose sanctions. 

o  Enhance  internal  processes  to  check  that  individual  operators  comply  with 
their  process  commitments  and  to  monitor  the  occurrence  and  outcome  of 
bilateral disputes in a confidential manner. 

3.2.3.  National platforms of the SCI 

Under  the  SCI,  guidelines  have  been  developed  for  the  creation  of  so-called  national 
platforms.  Aspects  covered  by  these  guidelines  include  the  composition,  rules  of  procedure 
and  awareness  raising  activities  of  national  initiatives.  On  this  basis,  a  process  of  mutual 
recognition can be launched between the SCI and a national initiative to officially establish a 
platform.  Such  platforms  have  to  date  been  established  in  Belgium,  the  Netherlands  and 
Finland.  In  Germany,  stakeholder  associations  throughout  the  food  supply  chain,  including 
farmer representatives, are envisaging setting up a similar platform. 

The  external  study  has  shown  that  awareness  about  SCI  is  higher  in  those  countries  than 
elsewhere  in  Europe.  Furthermore  where  a  national  platform  is  in  place,  awareness  of  that 
platform  is  not  higher  than  awareness  of  the  SCI.  There  is  also  evidence  that  both  the  EU-
wide principles of good practice and the SCI  acted as a catalyst for developing the national 
platforms. 

The Belgian initiative (established in May 2010) pre-dates the EU-wide SCI and therefore had 
more  time  to  have  an  impact.  In  June  2014, the  initiative  has  been  recognised  as  a  national 
platform  of  the  SCI.  The  members  of  the  Belgian  platform  and  external  observers  broadly 
agree  that  it  delivered  significant  results.  Support  from  stakeholders  at  all  the  levels  of  the 
food  supply  chain,  including  farmers,  appears  to  have  helped  make  the  platform  more 
effective.  In  the  absence  of  national  legislation  on  UTPs,  the  platform  offers  operators  in 
Belgium  a  certain  level  of  protection  from  UTPs.  This  is  one  of  the  main  reasons  it  is 
considered so effective. 

The  Dutch  platform  was  officially  launched  at  the  same  time  as  the  SCI.  Dutch  farmers' 
representatives joined the platform. The platform was developed as a national pilot project on 
the basis of the EU-wide SCI. The pilot was initially planned to last for one year, but was later 
extended for another year to give it more time to produce results. 

The  Finnish  platform  was  launched  in  January  2014.  Consequently,  it  has  had  little  time  to 
have  effect.  It  originally  comprised  stakeholders  throughout  the  supply  chain,  including 
farmers. However, in September 2015 the national farmers’ union withdrew pointing out that 
no cases were brought forward in the first year and a half of its existence, meaning they did 
not consider the initiative as an efficient tool in ensuring a better functioning, balanced food 
chain.  This  setback  will  probably  not  help  the  platform  deliver  more  tangible  results  in  the 
near future. 

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4. 

CONCLUSIONS 

The  Commission  Communication  of  July  2014  suggested  a  combination  of  voluntary 
initiatives and regulatory measures to tackle UTPs. In this respect, there has been significant 
progress over the last few years.  

Voluntary  initiatives:  The  EU-wide  Supply  Chain  Initiative  has  been  launched  and  gained 
significant  participation.  This  stimulated  the  discussion  of  best  practices  and  UTPs  among 
operators  and  started  to  induce  a  cultural  change  in  the  food  supply  chain.  Several  national 
platforms have been established under the EU-wide initiative which is another positive signal. 
This report has found that voluntary initiatives seem to work better in some countries than in 
others.  Belgium's  initiative  is  an  example  of  where  a  voluntary  platform  seems  to  be  an 
efficient  approach  to  tackling  UTPs,  meaning  a  regulatory  system  does  not  seem  to  be 
required. In other countries, for example the United Kingdom, voluntary initiatives were less 
successful,  confirming  the  need  for  regulatory  measures  and  effective  independent 
enforcement. 

Regulatory  frameworks:  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. Therefore, given the positive developments 
in parts of the food chain and since different approaches could address UTPs effectively, the 
Commission does not see the added value of a specific harmonised regulatory approach at EU 
level  at  this  stage.  However  the  Commission  recognises  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.  

As  regards  voluntary  initiatives,  the  Commission  concludes  that  the  SCI  has  already 
accomplished some achievements but there is still room for improvement. In order to increase 
the  initiative's  credibility  and  effectiveness  in  tackling  UTPs,  the  Commission  proposes  a 
discussion  with  the  relevant  stakeholders  on  how  to  improve  the  SCI  under  the  High  Level 
Forum for a Better Functioning Food Supply Chain. The objective is to improve awareness of 
the  SCI,  especially  among  SMEs,  ensure  the  impartiality  of  the  SCI's  governance  structure, 
allow  alleged  victims  of  UTPs  to  complain  confidentially  and  grant  investigatory  and 
sanctioning powers to independent bodies. 

The Commission will continue to monitor closely the situation regarding both the voluntary 
and  regulatory  frameworks.  The  Commission’s  High  Level  Forum  for  a  Better  Functioning 
Food  Supply  Chain  will  continue  the  dialogue  with  operators,  Member  States  and  other 
stakeholders  on  ensuring  the  promotion  of  good  practices,  the  emergence  of  national 
platforms and, in particular, the enhancement of the SCI. In any event, before the end of its 

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mandate  the  Commission  will  re-assess  the  potential  added  value  of  EU  action  to  address 
UTPs in the light of new developments, or a lack thereof.  

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