COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Initiative to improve the food supply chain (unfair trading practices) Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on unfair trading practices in business-to-business relationships in the food supply chain
Date: 2018-04-12
Institutions: Directorate-General for Agriculture and Rural Development, European Commission
Subjects: agri-foodstuffs, chain store, consumer protection, food industry, restriction on competition, small and medium-sized enterprises, supplier, supply, unfair terms of contract

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   EUROPEAN COMMISSION  Brussels, 12.4.2018 SWD(2018) 93 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Initiative to improve the food supply chain (unfair trading practices) Accompanying the document Proposal for a   DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on unfair trading practices in business-to-business relationships in the food supply chain {COM(2018) 173 final} - {SWD(2018) 91 final} - {SWD(2018) 92 final}  
 
 
Impact assessment on the initiative to improve the food supply chain – unfair trading practices  

Executive Summary  

A. Need for action  

What is the problem and why is it a problem at EU level?  

Bargaining  power  between  operators  in  the  food  supply  chain  (FSC)  differs;  weaker  parties  (e.g. 
farmers)  are  victims  of  unfair  trading  practices  (UTPs).  National  regimes  on  UTPs  vary,  with  little 
coordination between Member States (MS). This leaves operators in some MS under-protected, trans-
lates into different business conditions across MS, and creates uncertainty for cross-border trade.  

What should be achieved?  

Addressing UTPs contributes to a level playing field and enables effective redress for operators facing 
UTPs; this contributes to the CAP objectives of a fair standard of living for people engaged in agri-
culture, greater resilience of weaker operators, and better functioning of the FSC.  

What is the value added of action at the EU level (subsidiarity)?  

EU action provides a minimum  common  framework, improves protection against  UTPs and reduces 
repercussions along the FSC. It also contributes to fair living standards of the agricultural community 
(TFEU Art. 39) and to coordination and exchange of best practices between MS; without EU action 
this would be difficult.  

B. Solutions  

What are the various options to achieve the objectives? Is there a preferred option?  

Options are broken down by degree of harmonisation, scope of UTP prohibitions, product coverage, 
operator  coverage,  enforcement,  and  coordination  of  MS.  Preferred:  partial  harmonisation  of  UTP 
rules, covering agricultural and processed products, protecting SMEs, minimum requirements for en-
forcement, and an enforcement mechanism at EU level. 

What are different stakeholders' views? Who supports which option?  

Most stakeholders who responded to the open public consultation strongly support EU action, incl. on 
enforcement. (Large) retailers disagree that UTPs occur widely and oppose EU measures.  

C. Impacts of the preferred option  

What are the benefits of the preferred option (if any, otherwise of main ones)?  

Small  operators  benefit  from  protection  through  UTP  legislation,  which  increases  their  efficiency. 
These gains should result in positive social and economic impacts on society.  

What are the costs of the preferred option (if any, otherwise of main ones)?  

Companies’  compliance  costs  are  not  expected  to  be  major.  Social  and  environmental  impacts  are 
expected to be neutral or even positive; there could be costs for national administrations (below). 

What are the impacts on SMEs and competitiveness? 

SMEs would be better protected, overall competitiveness is expected to increase.  

Will there be significant impacts on national budgets and administrations?  

A majority of MS already have some form of UTP rules in place; for them administrative costs will be 
limited. For other MS costs would be somewhat higher, but the experience of MS with UTP legislation 
shows that implementation costs are generally low and can be absorbed by existing structures. 

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Will there be other significant impacts?  

Third-country suppliers will also be covered.  

Proportionality?  

Only  SMEs,  the  most  damaging  UTPs,  and  areas  where  MS  cannot  achieve  the  objectives  on  their 
own are covered. Expected costs are minimal. MS can maintain their regimes and legislate beyond the 
policy’s scope.  

D. Follow up  

When will the policy be reviewed? 

Based on MS reports the policy will be monitored annually by an ad hoc expert group. A full review 
will be conducted after four years.  

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