COMMISSION STAFF WORKING DOCUMENT 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, perishable goods, restriction on competition, small and medium-sized enterprises, supplier, supply, unfair terms of contract

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 12.4.2018 SWD(2018) 92 final  COMMISSION STAFF WORKING DOCUMENT  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) 93 final}  
 
 
1 

INTRODUCTION ........................................................................................................................ 7 

1.1

  General ................................................................................................................................................ 7 

1.2

  Political context .................................................................................................................................... 8 

1.3

  Unfair trading practices and their relevance in the agricultural sector ................................................... 9 

2  PROBLEM DEFINITION ........................................................................................................ 11 

2.1

  Overview of the problem definition .................................................................................................... 11 

2.2

Introduction ....................................................................................................................................... 11 

2.3

  Occurrence of unfair trading practices in the food supply chain ........................................................... 12 

2.4

  Under-protection against UTPs in Member States ............................................................................... 13 

2.5

  Harm caused by unfair trading practices ............................................................................................. 15 
Operators ................................................................................................................................. 15 
Consumers ................................................................................................................................ 18 

2.5.1.1
2.5.1.2

2.6

  What are the problem drivers? ........................................................................................................... 20 
Imbalance of bargaining power ......................................................................................................... 20 
2.6.1 
Divergence of UTP rules at the national level .................................................................................... 21 
2.6.2 
Lack of coordination among enforcement authorities ...................................................................... 22 
2.6.3 

2.7

  How will the problem evolve? ............................................................................................................ 22 

2.8

  Prior evaluations ................................................................................................................................ 26 

3  WHY SHOULD THE EU ACT? ............................................................................................... 26 

3.1

Legal basis for EU action ..................................................................................................................... 26 

3.2

  Subsidiarity: Necessity of EU action .................................................................................................... 28 

3.3

  Subsidiarity: Added value of EU action ................................................................................................ 28 

4  OBJECTIVES: WHAT IS TO BE ACHIEVED? .................................................................... 34 

4.1

  General objectives .............................................................................................................................. 34 

4.2

  Specific objectives .............................................................................................................................. 35 

4.3

  Consistency with other EU policies ...................................................................................................... 35 

5  WHAT ARE THE AVAILABLE POLICY OPTIONS? ......................................................... 37 

5.1

Introduction ....................................................................................................................................... 37 

5.2

  Degree of harmonisation of substantive UTP rules .............................................................................. 37 
5.2.1 
Baseline .............................................................................................................................................. 37 
5.2.2  Options discarded at an early stage: detailed harmonisation of substantive UTP rules ................... 37 

1 

 
 
 
 
 
 
 
5.2.3 

Partial harmonisation of substantive UTP rules ................................................................................. 38 

5.3

  Scope of UTP prohibition .................................................................................................................... 38 
Baseline .............................................................................................................................................. 38 
5.3.1 
UTPs subject to generally formulated prohibition (based on fairness) ............................................. 38 
5.3.2 
Prohibiting specific UTPs .................................................................................................................... 39 
5.3.3 
Unilateral and retroactive changes to contracts ...................................................................... 41 
Last-minute order cancellations  concerning perishable products ........................................... 42 
Claims for wasted or unsold products ...................................................................................... 42 
Payments for perishable products later than 30 days .............................................................. 42 
Claims for contributions to promotional or marketing costs of buyer ..................................... 43 
Requests for upfront payments to secure or retain contracts without consideration ............ 44 
Criteria concerning the assessment of unfairness of the practices .......................................... 44 

5.3.3.1
5.3.3.2
5.3.3.3
5.3.3.4
5.3.3.5
5.3.3.6
5.3.3.7

  Operationally, an EU approach based on the options set out in section 5 should incorporate the said 
5.4
considerations and be shaped accordingly. Coverage of products ................................................................ 44 
Baseline .............................................................................................................................................. 44 
Agricultural and processed agricultural products covered ................................................................ 45 
Agricultural products covered ............................................................................................................ 45 

5.4.1 
5.4.2 
5.4.3 

5.5

  Operators covered by UTP rules .......................................................................................................... 45 
Baseline .............................................................................................................................................. 45 
5.5.1 
UTP rules apply in situations characterised by weak bargaining power ............................................ 45 
5.5.2 
UTP rules apply to all operators ......................................................................................................... 46 
5.5.3 
UTP rules ‘benefit’ 3rd country suppliers ............................................................................................ 46 
5.5.4 
UTP rules ‘benefit’ suppliers situated in the EU................................................................................. 46 
5.5.5 

5.6

  Enforcement ....................................................................................................................................... 47 
5.6.1 
Baseline .............................................................................................................................................. 47 
5.6.2  Options discarded at an early stage ................................................................................................... 47 
5.6.3  Minimum enforcement requirements “plus” .................................................................................... 47 
5.6.4  Minimum enforcement requirements ............................................................................................... 49 

5.7

  Coordination of enforcement authorities ............................................................................................ 49 
Baseline .............................................................................................................................................. 49 
5.7.1 
Coordination ...................................................................................................................................... 50 
5.7.2 

5.8

Legal instrument to be used ................................................................................................................ 50 
Recommendation ............................................................................................................................... 50 
Legally binding instrument ................................................................................................................. 51 

5.8.1 
5.8.2 

6  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? .............................................. 51 

6.1

Introduction ....................................................................................................................................... 51 

6.2

6.2.1 

6.2.1.1
6.2.1.2
6.2.1.3

Impact on operators, consumers and Member States ......................................................................... 52 
Impact on economic operators .......................................................................................................... 52 
Benefits ..................................................................................................................................... 52 
Harm ......................................................................................................................................... 54 
Costs ......................................................................................................................................... 56 
Impact on consumers including impact on innovation ...................................................................... 57 
Impact on Member States ................................................................................................................. 58 
Social and environmental impacts ..................................................................................................... 61 

6.2.2 
6.2.3 
6.2.4 

6.3

Impact of the specific option components ........................................................................................... 61 
Scope of UTP rules: Specific list of prohibited UTPs or general (‘principles-based’) prohibition ...... 62 

6.3.1 

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Coverage of products: agricultural products or agricultural and processed agricultural products ... 63 
6.3.2 
6.3.3 
Scope in terms of operators: (i) all operators in the food supply chain protected or protection 
restricted to weaker operators; (ii) question of coverage of third-country suppliers ..................................... 64 
Enforcement: minimum requirements or minimum requirements "plus" ........................................ 65 
6.3.4 
Coordination: network of dedicated authorities or baseline (High Level Forum) ............................. 65 
6.3.5 
Legal instrument: soft law (recommendations) or legally binding instrument ................................. 65 
6.3.6 

6.4

  Option packages ................................................................................................................................. 66 

7  HOW DO THE OPTIONS COMPARE? ................................................................................ 67 

8  PREFERRED OPTION ............................................................................................................ 68 

9  MONITORING AND EVALUATION ..................................................................................... 69 

LIST OF ANNEXES ........................................................................................................................... 71 

ANNEX 1: PROCEDURAL INFORMATION ................................................................................ 74 

1 

2 

3 

Lead DG, Decide Planning/Commission Work Programme references.................................................. 74 

Organisation and timing ..................................................................................................................... 74 

External expertise and evidence base ................................................................................................. 75 
3.1 
Joint Research Centre academic workshop on UTPs in the food supply chain ...................................... 75 
3.2  Study on UTPs at Member State level .................................................................................................... 76 

4 

Regulatory Scrutiny Board .................................................................................................................. 77 

ANNEX 2: STAKEHOLDER CONSULTATION ........................................................................... 82 

1 

2 

Stakeholder consultation process ....................................................................................................... 82 

Summary of stakeholder consultation results ..................................................................................... 82 
2.1 
Inception impact assessment ................................................................................................................. 82 
2.2  Open public consultation ........................................................................................................................ 83 
2.3  Targeted questionnaire to undertakings ................................................................................................ 86 
2.4  Targeted questionnaire to consumer organisations ............................................................................... 86 
2.5  Questionnaire to Member State public authorities ................................................................................ 87 
2.6 
Joint Research Centre academic workshop on UTPs in the food supply chain ...................................... 87 
2.7  Ad hoc meetings with food supply chain stakeholders .......................................................................... 87 
2.8  Civil Society Dialogue groups .................................................................................................................. 87 

ANNEX 3: WHO IS AFFECTED AND HOW? .............................................................................. 88 

1 

2 

3 

Practical implications of the initiative ................................................................................................. 88 

Effect on food supply chain operators ................................................................................................. 88 

Summary of costs and benefits ........................................................................................................... 91 

ANNEX 4: ANALYTICAL METHODS ........................................................................................... 93 

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ANNEX A: RELEVANT EU DOCUMENTS CONCERNING UNFAIR TRADING PRACTICES
 .............................................................................................................................................................. 94 

ANNEX B: THE “FEAR FACTOR” AND DIFFERENT ENFORCEMENT APPROACHES TO 
UNFAIR TRADING PRACTICES ................................................................................................... 95 

1 

2 

3 

4 

Fear factor .......................................................................................................................................... 95 

Judicial redress ................................................................................................................................... 95 

Administrative redress ....................................................................................................................... 96 

The voluntary Supply Chain Initiative .................................................................................................. 97 

ANNEX C: UTPS, AGRICULTURE AND THE AGRI-FOOD SECTOR: QUANTITATIVE 
EVIDENCE.......................................................................................................................................... 98 

1 

2 

3 

4 

5 

6 

7 

8 

9 

The food supply chain ......................................................................................................................... 98 

Economics of agriculture ................................................................................................................... 101 

Agriculture specifics .......................................................................................................................... 102 

Structure of the different stages of the food chain ............................................................................ 105 

Price transmission ............................................................................................................................ 109 

Rules on UTPs and price evolution .................................................................................................... 111 

Intra-EU Trade .................................................................................................................................. 113 

Share of cooperative products in retail sales ..................................................................................... 121 

Share of agricultural products (in the meaning of the Treaty) in retail sales ....................................... 121 

ANNEX D: TABLE ON TRANSPOSITION OF LATE PAYMENT DIRECTIVE IN MEMBER 
STATES IN TERMS OF PAYMENT TERMS .............................................................................. 124 

ANNEX E: COMPARISON OF POLICY OPTIONS .................................................................... 132 

1 

2 

3 

4 

5 

6 

7 

Degree of harmonisation of substantive UTP rules ............................................................................ 132 

Scope of UTP definition .................................................................................................................... 133 

Coverage of products ........................................................................................................................ 134 

Operators covered ............................................................................................................................ 134 

Enforcement ..................................................................................................................................... 135 

Coordination of enforcement............................................................................................................ 136 

Legal instrument............................................................................................................................... 137 

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8 

Comparison of option packages ........................................................................................................ 137 

ANNEX F: STUDY - OVERVIEW ON “SPECIFIC REGULATIONS ON UNFAIR TRADING 
PRACTICES IN MEMBER STATE IN THE BUSINESS-TO-BUSINESS RETAIL SUPPLY 
CHAIN” ............................................................................................................................................. 140 

ANNEX G: STUDY ANNEXES - OVERVIEW ON “SPECIFIC REGULATIONS ON UNFAIR 
TRADING PRACTICES IN MEMBER STATE IN THE BUSINESS-TO-BUSINESS RETAIL 
SUPPLY CHAIN”  ............................................................................................................................ 196 

ANNEX H: ECONOMIC IMPACT OF UNFAIR TRADING PRACTICES REGULATIONS IN 
THE FOOD SUPPLY CHAIN (DG COMPETITION) ................................................................ 260 

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Glossary 

Term or acronym 

Meaning or definition 

AUSD 

Australian Dollar 

B2B 

B2C 

CAP 

CF 

CMO 

CR5 

ECB 

EP 

EU 

EUR 

GBP 

GCA 

MTK 

OECD 

SCI 

SME 

TFEU 

UK 

UTP 

Business-to-business 

Business-to-consumer 

Common Agricultural Policy 

Charter of Fundamental Rights of the European Union 

Common Market Organisation 

Concentration ratio of the five largest firms 

European Central Bank 

European Parliament 

European Union 

Euro 

British Pound 

Grocery Code Adjudicator (UK) 

The Finnish Farmers' Association 

Organisation for Economic Co-operation and Development 

Supply Chain Initiative 

Small and medium-sized enterprises 

Treaty on the Functioning of the European Union 

United Kingdom 

Unfair trading practice 

6 

 
 
 
 
1  Introduction 

1.1

  General 

The  present  impact  assessment  report  examines  the  case  for  introducing  EU  rules  governing 
unfair trading practices (UTPs) in the agri-food chain including their enforcement. It addresses 
questions such as the nature and scope of the problem as well as the added value of EU measures 
over existing Member States’ measures and self-regulatory initiatives.  

The options discussed in sections 6 and 7 of this report would aim to complement existing rules 
in  Member  States  and  the  existing  self-regulatory  initiatives  (EU-wide  or  national)  rather  than 
replace them.  

Possible measures enhancing transparency in the food supply chain, which constituted a second 
component of the inception impact assessment of July 20171, will be subject to a separate work 
strand.  The  third  component  of  the  said  inception  impact  assessment  concerning  producer 
cooperation  was  covered  by  recent  changes  to  basic  acts  decided  in  the  framework  of  the  so-
called Omnibus regulation.2 It is therefore not subject of this impact assessment. 

UTPs can be broadly defined as practices which grossly deviate from good commercial conduct, 
are contrary to good faith and fair dealing and are unilaterally imposed by one trading partner on 
another  (business-to-business).3  The  European  Commission  identified  four  key  categories  of 
UTPs that “an effective regulatory framework should cover”:4 

-  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.  

There  are  strong  indications  that  UTPs  occur  frequently  in  the  EU  food  supply  chain  and  that 
they  can  be  detrimental  mainly  to  otherwise  viable  smaller  operators  such  as  agricultural 
producers and SME processors of food products. 

Twenty EU Member States’ have laws, regulations and administrative provisions specifically on 
UTPs.  While  different  in  shape  and  form,  these  provisions  generally  prohibit  certain  unfair 

1 http://ec.europa.eu/info/law/better-regulation/initiatives/ares-2017-3735471_en  
2 See http://www.consilium.europa.eu/en/policies/cap-simplification/omnibus-regulation-agriculture/ and 
Regulation (EU) 2017/2393 of the European Parliament and of the Council of 13 December 2017 (Article 152 
CMO)   
3 European Commission Communication, Tackling unfair trading practises in the business-to-business food supply 
chain, 15 July 2014. 
4 Report from the European Commission to the European Parliament and the Council on unfair business-to-business 
trading practices in the food supply chain, 29 January 2016, p. 5. 

7 

 
 
                                                 
behaviour  between  businesses,  often  with  a  view  to  protecting  the  position  of  weaker  parties. 
Together with self-regulation, such as the voluntary Supply Chain Initiative5, they aim to ensure 
the good functioning of the food supply chain.  

There are, as of yet, no EU horizontal rules on unfair trading practices between businesses.6 EU 
rules on unfair commercial practices apply to business-to-consumer (B2C) situations. They do, 
as such, not cover business-to-business (B2B) situations although Member States may choose to 
extend their scope. 

1.2

  Political context 

The  discussion  about  UTP  measures  at  the  EU  level  dates  back  to  2009  (see  Annex  A  for  a 
selection  of  relevant  documents).7    The  European  Commission’s  “Communication  on  a  better 
functioning  food  supply  chain”  of  28  October  20098  and  its  Communication  “Tackling  unfair 
trading practises in the business-to-business food supply chain” of 15 July 20149 are important 
documents in this regard. 

In 2013, the Commission carried out a public consultation on the basis of questions in a “Green 
Paper on unfair trading practices in the business-to-business food and non-food supply chain in 
Europe”.10  

A European Commission report from January 2016 concluded that at that juncture a harmonised 
regulatory  approach  under  EU  law  would  not  add  value.11  Nonetheless,  it  committed  the 
Commission  to  re-assessing  the  need  and  added  value  of  EU  action  before  the  end  of  its 
mandate.12 

In  June  2016,  a  European  Parliament  resolution,  which  garnered  exceptionally  strong  support, 
invited the European Commission to submit a proposal for an EU-level framework concerning 
UTPs.13  

In  September  2016,  the  European  Economic  and  Social  Committee  published  a  report  calling 
upon  the  Commission  and  the  Member  States  to  take  swift  action  to  prevent  UTPs  by 
establishing  an  EU  harmonised  network  of  enforcement  authorities,  so  as  to  create  a  level 
playing field within the single market.14 

In  November  2016,  an  independent  high-level  group  of  experts  nominated  by  the  European 
Commission  presented  its  findings  in  a  report  entitled  ‘Improving  Market  Outcomes  – 

5 http://www.supplychaininitiative.eu/  
6 Directive 2006/114/EC covers specifically misleading and comparative advertising. 
7 European Commission Communication on a better functioning food supply chain, 28 October 2009. 
8 http://ec.europa.eu/economy_finance/publications/publication16061_en.pdf  
9 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2014:0472:FIN  
10 Consultation by the European Commission on the Green Paper on unfair trading practices in the business-to-
business food and non-food supply chain in Europe. 
11 Report from the European Commission to the European Parliament and the Council on unfair business-to-
business trading practices in the food supply chain, 29 January 2016. 
12 Idem, pp. 12-13.  
13 European Parliament resolution on unfair trading practices in the food supply chain, 7 June 2016. 600 votes in 
favour.   
14 COM(216) 32 final, 30 September 2016. 

8 

 
 
                                                 
Enhancing  the  Position  of  Farmers  in  the  Supply  Chain’  (Report  of  the  Agricultural  Markets 
Task  Force).15  It  recommended  EU  legislation  in  the  areas  of  unfair  trading  practices  for 
agricultural products, producer cooperation and market transparency, among others. 

The Council Conclusions of  December 2016 invited the Commission  to  undertake, in  a timely 
manner,  an  impact  assessment  with  a  view  to  proposing  an  EU  legislative  framework  or  other 
non-legislative measures to address UTPs.16  

In  the  recent  Omnibus  context,  the  EP  proposed  an  amendment  which  meant  to  commit  the 
Commission  to  submit  a  legislative  proposal  on  UTPs  by  mid-2018.  The  amendment  was  not 
retained  due  to  the  European  Commission’s  institutional  prerogative  but  the  European 
Commission made a declaration on the topic of unfair trading practices.17  

The Commission Work Programme for 2018 states that the Commission "will propose measures 
to improve the functioning of the food supply chain to help farmers strengthen their position in 
the market place and help protect them from future shocks" (new initiative).18  

1.3

  Unfair trading practices and their relevance in the agricultural sector 

The  integration  of  EU  agriculture  and  food  supply  chains  in  global  markets  presents 
opportunities but also risks.19 Successive reforms of the common agricultural policy (CAP) since 
1992  have  led  to  a  paradigm  shift  from  price  to  income  support.20  Accordingly,  primary 
producers do no longer enjoy systematic price support via market measures. Support through the 
CAP  rather  is  granted  through  decoupled  income  support  (direct  payments).21  Trade  barriers 
have  been  removed  through  more  liberal  trade  agreements.  This  has  resulted  in  EU  prices  of 
agriculture  products  being  largely  aligned  with  world  market  prices.  EU  farming  and  EU 
agriculture  have  become  competitive  in  this  new  global  context  and  have  made  an  important 
contribution to the annual trade surpluses the EU has achieved in food products since 2009.22 But 
the removal of price support and the insertion into global markets have exposed the EU agri-food 
sector  to  global  market  instabilities  and  their  corollary,  price  volatility  and  higher  income 
variability. 20% of farmers experience income drops of more than 30% each year.23 

The CAP’s rationale roots in the socio-economic specificities of the sector.24 While business risk 
is  inherent  in  all  economic  activity,  agriculture  is  particularly  fraught  with  uncertainty,  in 

15 Report of the Agricultural Markets Task Force, Improving Market Outcomes - Enhancing the position of farmers 
in the supply chain, November 2016. 
16 Council Conclusions of 12 December 2016, Strengthening farmers’ position in the food supply chain and tackling 
unfair trading practices.  
17 See footnote 2, p. 49 of OJ: “The Commission confirms that it has launched an initiative on the food supply chain 
which is now proceeding through the various stages required by the Better Regulation guidelines. It will decide on a 
possible legislative proposal once this procedure has been completed, if possible in the first half of 2018.” 
18 Commission Work Programme 2018 - An agenda for a more united, stronger and more democratic Europe. 
19 Agricultural Markets Task Force report, independent expert group, November 2016, pp. 11-12. 
20 The Common agricultural policy also covers fisheries, see Article 38 and Annex I TFEU. 
21 Agricultural Markets Task Force report, independent expert group, November 2016, pp. pp. 48-49. 
22 Annual Activity Report, 2016, DG Agriculture, p. 14. 
23 Idem, p. 4. 
24 Modernising & Simplifying the CAP - Economic challenges facing EU agriculture, background document, 18 
December 2017. 

9 

 
 
                                                 
particular  due  to  weather  which  has  a  direct  impact  on  the  variability  of  the  quantity  and  the 
quality supplied. Everyone needs food for survival, but demand for food is relatively inelastic: it 
does  not  change  significantly if prices  fall  or  increase. This means that  farmers cannot rely on 
simply selling more of their output to compensate for lower prices. Over-supply therefore has a 
significant impact on the price levels as well as on the volatility of prices.25 Moreover, there are 
long production lags due to the biological processes on which agricultural production depends. 
For  example,  it  takes  two  years  for  a  dairy  cow  to  reach  the  stage  where  it  produces  milk. 
Production decisions have to be taken in advance with limited knowledge of final outcomes and 
against  possibly  changing  market  situations.  These  factors  can  have  a  significant  impact  on 
farmers’ incomes, and yet they have virtually no control over them.  

Agricultural producers are particularly vulnerable to UTPs26 as they often lack bargaining power 
that would be equal to that of their downstream partners. Their alternatives in terms of getting 
their products to consumers are limited (this vulnerability is exacerbated where so called hold-up 
situations occur which may make alternatives virtually non-existing due to the perishability of a 
product27). 

In an agricultural policy environment which is distinctly more market oriented than before and 
which aims at harnessing free trade opportunities, the good governance of the food supply chain 
has  become  more  important  for  operators  including  farmers.  Such  good  governance  should 
ensure  that  they  are  able  to  develop  their  business  and  compete  on  fair  terms,  thereby 
contributing to the overall efficiency of the chain. Unfair business conduct by operators wielding 
significant bargaining power that is not prohibited or respective redress possibilities that lack in 
effectiveness are liable to undermine the economic viability of victims of UTPs as well as their 
trust in the overall fairness of the food supply chain.28  

The  second  highest  priority  for  citizens  concerning  the  common  agricultural  policy  (CAP)  is 
strengthening the farmer’s role in the food chain (45%).29  

The  EU’s  Common  Agricultural  Policy  (CAP)  does  provide  for  measures  which  aim  to 
strengthen  farmers’  position  in  the  food  supply  chain.30  These  include  start-up  funding  (rural 
development  regulation)  for  producer  groups  and  regulatory  exemptions  from  competition  law 
for  farmers´  organisations.  However,  these  policies  have  not  fundamentally  changed  the 
fragmentation of agricultural producers. What is more, producer organisations, even where they 
do exist, can often not compensate for the lack of bargaining power of farmers in relation to their 
larger  and  more  concentrated  partners  in  the  supply  chain.  The  CAP  does  not  currently  cover 

25 See Gregory King and Charles Davenant in one of the first laws of the history of economics in the 17th century. 
26 See for instance European Parliament resolution on unfair trading practices in the food supply chain, 7 June 2016, 
preamble (recital A). 
27 See Agricultural Markets Task Force report, independent expert group, November 2016, p. 29 
28 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Sexton, p. 11. 
29 Eurobarometer survey, October 2015 
30 See recital 139 of the CMO regulation (Regulation (EU) No 1308/2013 establishing a common organisation of 
the markets in agricultural products): the regulation promotes the organisation of farmers in producer organisations 
so as to strengthen their bargaining power vis-à-vis downstream operators, thereby resulting in a fairer distribution 
of added value along the supply chain. See also European Court of Justice, judgment in Case C-671/15, APVE, 
paragraph 65 “En outre, l’objectif de concentrer l’offre, afin de renforcer la position des producteurs face à une 
demande sans cesse plus concentrée, peut également justifier une certaine forme de coordination de la politique 
tarifaire des producteurs agricoles individuels au sein d’une [organisation des producteurs] ou d’une [association 
des organisations des producteurs]." 

10 

 
 
                                                 
UTPs.31  

2  Problem definition 

2.1

  Overview of the problem definition 

Figure 1: Schematic overview of market dynamics, drivers, problems and consequences 

2.2

Introduction  

Operators  with significant  bargaining power can  impose  pressure on other weaker operators in 
the food supply chain. 32 At times, this pressure occurs in the form of a party being subjected to 
unfair trading practices (UTPs). UTPs put companies’ profits and margins under pressure, which 
can  result  in  a  misallocation  of  resources  and  even  drive  otherwise  viable  and  competitive 
players  out  of  business.33  In  such  situations,  a  well-targeted  regulation  of  certain  trading 
practices aiming at ensuring fairness between actors in the food supply chain can help to resolve 
specific issues.34 

For illustration, being faced with a retroactive unilateral reduction of the contracted quantity for 
perishable goods means income foregone for an operator who may not easily find alternatives. 
Being  paid  for  perishable  products  only  months  after  they  are  delivered  and  sold  by  the 

31 A recent change to the common market organisation in the Omnibus context introduces a right of producers and 
producer organisations to ask for a written contract from their first purchaser. (Regulation (EU) 2017/2393 of the 
European Parliament and of the Council of 13 December 2017, amendment 15 to Regulation (EU) No 1308/2013) 
32 European Commission, Competition in the food supply chain, Staff Working Document, 28 October 2009, p. 28 
refers to “stronger buyers, who are often perceived as gatekeeper to consumer markets”. See also EY, Cambridge 
econometrics ltd, Arcadia international (2014), The economic impact of modern retail on choice and innovation in 
the EU food sector, study for the European Commission, p. 45. 
33 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Menard, p. 75. 
34 See Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 1.  

11 

fdngjngMARKET DYNAMICS PROBLEMSCONSEQUENCESConcentration of downstream operators: retailand processingAtomistic structure of agricultural producers & small manufacturers of food productsOccurrenceof unfair trading practices Divergence ofUTP rulesDissimilar business conditions for operators in EUInsertion of European food supply chains in global marketMarket orientation of EU agriculture  (no more price support)Increased price and income variability inagricultureDiminished part of added value in food  supply chain for weaker partiesTransfer of excessive risk and costs to weaker partiesLack of coordination among MS enforcement authorities DRIVERS Under-protection against UTPsImbalance of bargaining power 
 
  
 
                                                 
purchaser  in  a  store  constitutes  extra  financial  cost  for  the  supplier.  Obliging  suppliers  to  take 
back products not sold by the purchaser may constitute an undue transfer of risk to a supplier that 
has  repercussions  on  his  security  of  planning  and  investment.  Being  asked  to  contribute  to 
generic  in-store  promotional  activities  of  distributors  without  drawing  a  commensurate  benefit 
unduly reduces a supplier’s margin. 

According to the OECD, “there are concerns with ‘fairness’ and that the increased bargaining 
power  of  downstream  food  processors  and  retailers,  has  a  potentially  negative  impact  on  the 
farm  sector”.35    Fairness  considerations  also  inform  the  reactions  to  surveys  undertaken  in 
relation to the occurrence and impact of UTPs on the functioning of the food supply chain.36 

2.3

  Occurrence of unfair trading practices in the food supply chain  

There  is  a  wide-spread  consensus  that  UTPs  occur  throughout  the  food  supply  chain.37  Their 
frequency  distinguishes  the  food  supply  chain  from  other  supply  chains  in  terms  of  the 
magnitude  of  the  problem.38  Three  European  Commission  communications  since  2009  have 
focused on the food supply chain including unfair trading practices.39 Specific UTP rules in 20 
Member States40 bear witness to the significant concern about UTPs at the national level. Of the 
20  Member  States  which  have  UTP  rules,  12  Member  States  have  adopted  legislative 
instruments  specifically  applicable  to  the  food  supply  chain.  8  Member  States  have  adopted 
legislation  applicable  horizontally;  some  of  these  include  specific  provisions  for  the  food  and 
groceries trade.41 

35 Idem, p. 36. 
36 See for instance OECD, 15 May 2014, Competition issues in the food chain industry, pp. 29-30. See Joint 
Research Center report, Unfair trading practices in the food supply chain, 2017, Menard, p. 73: “Indeed, all of the 
above presume that UTPs matter because they distort ‘economic practices’, therefore impacting essentially the 
efficiency of market arrangements and the resulting allocation of resources. But there is more to ‘unfairness’. As 
emphasised by Fałkowski, ‘unfair’ is also about perception, which refers to social norms and values.” 
37 Supply Chain Initiative, Principles of Good Practice, 29 November 2011, p. 2. Joint Research Center report, 
Unfair trading practices in the food supply chain, 2017, Falkowski, p. 24. See also Report from the European 
Commission to the European Parliament and the Council on unfair business-to-business trading practices in the food 
supply chain, 29 January 2016, p. 9. See also European Commission, DG GROW, Summary of responses to the 
European Commission Green Paper, 2013, p. 10. Areté for European Commission, report, Monitoring of the 
implementation of principles of good practice in vertical relationships in the food supply chain, January 2016, p. 20: 
“The analysis of evidence from both desk research and the survey results allowed the study team to conclude that 
UTPs seem to occur across all Member States and at all stages of the food supply chain.” 
38 Sexton points out that if UTPs yield a competitive advantage, rivals may be tempted to follow suit to remain 
competitive. Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Sexton, p. 15.  
39 European Commission, Communication on a better functioning food supply chain, 28 October 2009. European 
Commission Communication, Tackling unfair trading practises in the business-to-business food supply chain, 15 
July 2014, 15 July 2014, p. 5: “While UTPs can, in principle, be present in any sector, stakeholder feedback to the 
Green Paper suggests that they are particularly problematic in the food supply chain.” Report from the European 
Commission to the European Parliament and the Council on unfair business-to-business trading practices in the food 
supply chain, 29 January 2016. 
40 See footnote 41.  
41 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p. 11; among the mentioned 20 Member 
States, 12 have adopted legislative instruments specifically applicable to the food supply chain, whereas 8 Member 
States have adopted legislation applicable to all sectors, although sometimes including specific provisions on 
practices in food and groceries trade (e.g. in France, Latvia and Portugal; in Latvia and in Portugal a specific list of 
prohibited UTPs has been provided for the food sector). 

12 

 
 
                                                 
The open public consultation of 2017 confirms the perception that UTPs are an issue in the food 
supply  chain:  90%  of  respondents  agreed  or  partially  agreed  that  such  practices  existed. 
Confirmation  rates  ranged  between  80%  for  trade  organisations  to  98%  for  civil  society 
respondents, 93% for organisations in the farming sector and 86% for organisations in the agri-
food sector.42 A 2016 study also concluded that UTPs occurred across all Member States and at 
all  stages  of  the  food  supply  chain  and  that  they  were  perceived  as  serious  by  most 
stakeholders.43 While there may be questions about some of the reported practices’ meeting the 
UTP definition, the outcome confirms the reactions to the European Commission’s Green Paper 
of 2013.44  

94%  of  farmers  and  95%  of  agri-food  cooperatives  report  having  been  exposed  to  at  least  one 
UTP  according  to  a  survey  by  Dedicated  Research  in  2013.45  Another  survey  conducted  by 
Dedicated  Research  in  2011  had  a  similar  result  (96%  of  respondents  {manufacturers  of  food 
products}  reported  to  have  been  subject  to  at  least  one  UTP).46  The  exception  as  regards  the 
question  about  the  occurrence  of  UTPs  is  retail  sector  organisations:  in  the  open  public 
consultation, only 12% of them agreed or partially agreed that UTPs existed in the food chain.47 

UTPs manifest themselves not only in the guise of unfair contractual terms such as for example 
specific contract clauses but also occur "behaviourally" after contracts have been established.48 A 
survey of milk producers carried out in four Member States in 2016 (Germany, France, Spain, 
Poland)  indicated  they  are  likely  to  occur  before,  during  and  after  the  contractual  phase 
(respectively 25%, 87% and 4% of the cases).49 

2.4

  Under-protection against UTPs in Member States 

The heterogeneity in the treatment of UTPs in Member States is significant.50 In certain Member 
States,  there  is  no  or  only  very  little  specific  protection  against  UTPs  meaning  that  operators 

42 8% - “rarely”. 5% “no opinion”: 5%. Further details of the consultation process can be found in Annex 2. 
43 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, p. 20: “Differences among Member States do exist (in 
particular, the survey showed a higher perceived exposure to UTPs in New Member States than in former EU15 
countries), but the problem is present in each Member State, and is perceived as serious by most stakeholders.” 
44 About 76% of the respondents asserted that UTPs existed and were of concern for operators in the food chain. 
182 organisations/public bodies/individuals replied to the consultation whereof 40% had no direct link to the food 
supply chain (public bodies included).   
45 Dedicated Research for COPA-Cogeca (European association of farmers and agricultural cooperatives), Impact of 
unfair trading practices in the European agri-food sector, June 2013, slide 25. The survey draws on a sample of 434 
respondents (214 farmers, 165 agri-food cooperatives, 55 processors). See also Europe Economics, Estimated costs 
of Unfair Trading Practices in the EU Food Supply Chain, May 2014.  
46 Survey on behalf of CIAA (Confederation of the Food and Drink Industry) and AIM (European Brands 
Association). 
47 Further details of the consultation process can be found in Annex 2. 
48 European Commission, DG GROW, Summary of responses to the European Commission Green Paper, 2013, p. 
10. 
49 Joint Research Center, from study in preparation. 
50 Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, Swinnen and 
Vandevelde, pp. 43-44. European Commission, Retail market monitoring report - Towards more efficient and fairer 
retail services in the internal market for 2020, 5 July 2010, p. 7: “Although certain national laws on unfair 
contractual terms between enterprises exist, they vary widely between Member States, which can lead to barriers 
fragmenting the internal market, distorting competition or increasing the risk of circumvention.” 

13 

 
 
                                                 
cannot rely on UTP rules to seek redress.  

No UTP legislation: 
Limited scope legislation 
(mainly 
UTP approach): 
Specific 
UTP: 

legislation 

consumer-type 

on 

Estonia, Luxembourg, Malta, Netherlands 
Belgium, Denmark, Finland, Sweden 

Austria,  Bulgaria,  Croatia,  Cyprus,  Czech  Republic,  France,  Germany, 
Greece,  Hungary,  Ireland,  Italy,  Latvia,  Lithuania,  Poland,  Portugal, 
Romania, Slovakia, Slovenia, Spain, United Kingdom 
Table 1: Member States by UTP legislation51 

The  fact  that  a  Member  State  has  opted  to  not  introduce  legislation  does  not  mean  that 
stakeholders consider the problem as non-existing.52 The link between perceptions by operators 
to  what  extent  UTPs  occur  and  the  efforts  made  by  the  Member  States  to  tackle  them  by 
legislative measures is relatively weak.  

Member States have different rules as regards UTP enforcement.53 General (contract) law may 
prohibit certain practices and victims have the option to seek redress before a court of civil law. 
But general contract law, to the extent it covers the practice at issue, may de facto be difficult to 
enforce: a weaker party to a commercial transaction is often unwilling to lodge a complaint for 
fear of compromising an existing commercial relationship with the stronger party (“one may win 
the case, but lose the business”).54  

Fear  of  retaliation55  is  an  important  driver  for  lack  of  effective  enforcement  and  the  limited 
amount of UTP cases coming to the fore; enforcement modalities which take this fear factor into 
account  can  improve  protection.56  Fear  of  retaliation  is  consistently  being  pointed  out  as  a 

51 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p. 11. 
52 79% of respondents in the open public consultation from Member States without legislation or only voluntary 
measures regulating UTPs (Belgium, Estonia, Denmark, Luxemburg, Malta, Netherlands and Sweden) agreed that 
UTPs in the food chain occurs "regularly" or "very regularly". According to the open public consultation, 70 % of 
the respondents in the Netherlands, Denmark and Sweden stated that UTPs in the food chain occur "regularly" or 
"very regularly"; 63 % expressed the view that they were in favour of action taken to tackle UTPs. See also a survey 
on UTPs in the Netherlands in 2014. Study by Dutch Akkerbouw 2014 (139 replies), referred to in undertakings´ 
replies to the targeted consultation. 72% of the members had experienced UTPs during the last 10 years. Producers 
of potatoes and vegetables were more exposed to UTPs than producers of arable crops. 91% of the respondents 
would prefer to have a public authority established to facilitate the tackling of UTPs. 
53 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p. 20 et seq. 
54 Idem, p. 23. See also Annex B. Report from the European Commission to the European Parliament and the 
Council on unfair business-to-business trading practices in the food supply chain, 29 January 2016, p. 9. European 
Commission, 2016 Commission Staff Working Document - Evaluation of Late Payment Directive/REFIT 
Evaluation, Staff Working Document, p. 26.  
55 Report from the European Commission to the European Parliament and the Council on unfair business-to-
business trading practices in the food supply chain, 29 January 2016, p. 6. See European Commission, 2016 report 
on Late Payment Directive, Staff Working Document, p. 26. See also, for example, SEO economisch onderzoek, 
Oneerlijke handelspraktijken, report for the Dutch ministry of economy, 2013, p. 19. 
56 See for instance German Bundeskartellamt, Sektoruntersuchung (sector inquiry), Nachfragemacht im 
Lebensmitteleinzelhandel, September 2014, p. 14. Many complaints to the authority are made requesting 
confidentiality. 

14 

 
 
                                                 
significant concern in consultations that were carried out among stakeholders57 and also informs 
the design of certain Member States’ regimes.58 The fear factor and its importance in relation to 
specific forms of enforcement regimes are discussed in greater detail in Annex B.59  

Under-protection  is  therefore  also  be  related  to  the  quality  of  enforcement  modalities.  Some 
Member  States  entrust  competition  authorities  with  ensuring  respect  of  unfair  trading  rules 
(Germany), or provide redress possibilities through administrative bodies other than competition 
authorities, for instance by having recourse to ombudsman-type systems (UK) or dedicated UTP 
authorities (France). A 2018 study shows that in as many as 18 Member States’ administrative 
authorities other than ordinary courts have powers to enforce rules addressing selected UTPs.60 
In  17  Member  States,  administrative  authorities  can  conduct  own  initiative  investigations 
concerning  UTPs.  In  14  Member  States,  administrative  authorities  can  receive  confidential 
complaints. But in  less than half of  EU Member States  (13) do administrative authorities have 
the power to do both.61   

2.5

  Harm caused by unfair trading practices 

2.5.1.1

  Operators 

Farmers,  processors,  traders,  wholesalers,  retailers  and  consumers  are  all  actors  in  the  food 
supply chain. Smaller operators in the food supply chain are particularly prone to be the victims 
of  UTPs  due  to  their,  in  general,  weak  bargaining  power  in  comparison  to  the  significant 
bargaining power wielded by large operators at other levels of the chain. UTPs are less likely to 
occur  when  the  parties  to  a  transaction  have  symmetric  bargaining  power.62  In  the  2017  open 
public  consultation,  respondents  identified  farmers  as  being  most  exposed  to  negative  effects 
from UTPs in the food supply chain although such effects can occur at all levels of the chain.63  

Having said this, there is little empirical  data going  beyond a few case studies which makes it 
difficult to establish the overall harm caused by UTPs. The so-called fear factor (see Annex B), 

57 Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, Swinnen and 
Vandevelde, p. 50. 
58 See for example UK, Statutory review of the Groceries Code Adjudicator: 2013-2016, July 2017, paragraph 61. 
59 In the Commission’s consultation it was also found that, while stakeholders wanted to be forthcoming with 
evidence, concerns about freedom of information requests or possible data leaks constituted a significant 
impediment to receiving contributions. 
60 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, pp. 22-23, Table No. 7: Enforcement, 
authorities and relative power. 
61 See suggestions 9 and 10 in Commission Communication, Tackling unfair trading practises in the business-to-
business food supply chain, July 2014, p. 12, suggestions 9 and 10.  
62 Gorton, M. et al., (2017) Methodological framework: review of approaches applied in literature to analyse the 
occurrence and impact of UTPs. Presentation at the workshop “Unfair trading practices in the food supply chain”, 
17 July 2017. However, their occurrence is not excluded even where asymmetry is absent; see Report of the Joint 
Research Center, Unfair trading practices in the food supply chain, 2017, Falkowski, p. 24. 
63 See Annex 2. 94% of respondents to this question agreed or partially agreed that appreciable negative effects 
occur for farmers. 83% agreed that such negative effects occurred for processors. UTPs are less frequent for retailers 
(38%). See also Areté for European Commission, report, Monitoring of the implementation of principles of good 
practice in vertical relationships in the food supply chain, January 2016, p. 20. The data collection strategy included 
a survey which targeted operators at all stages of the food supply chain in all 28 Member States, as well as other 
stakeholders (mainly associations/NGOs). A total of 1,124 completed and valid responses were collected. 

15 

 
 
                                                 
plays a significant role in this absence of empirical evidence at EU level, as does the lack of a 
precise definition of UTPs.  

Agricultural  producers,  including  their  associations,  can  be  direct  victims  of  UTPs.  But  UTPs 
affect producers even if they are not directly exposed to them, by virtue of the pressure to pass 
on UTP-induced costs until the weakest party is reached.64 This is congruous with a view of the 
food supply chain as a continuum of vertically inter-related markets.65 The negative effect of a 
UTP which occurs downstream, for instance between a processor and a retailer, often cascades 
backward in the chain to ultimately reach farmers.66  

A series of surveys undertaken during the last few years shows that UTPs occurring in the food 
supply chain are seen as detrimental by a large majority of operators, in particular smaller ones. 
They  perceive  UTPs  to  endanger  their  profitability  and  ability  to  compete  fairly  and  to  affect 
their  capacity  to  invest.67  They  decrease  the  part  of  the  added  value  generated  that  these 
operators would otherwise be able to appropriate. Qualitative research demonstrates suggests for 
instance that ex post unilateral changes to supply cause farmers and their organisations harm.68 

Literature69  also  identifies  negative  welfare  impacts,  competition  issues,  investment  and 
productivity  effects,  network  effects  and  market  failure.  Concerning  welfare  effects,  UTPs 
decrease the part of the added  value generated that these operators would otherwise be able to 
appropriate with possible lower returns to suppliers and/or financial gains not necessarily passed 
on  to  the  final  consumer.  Farmers,  often  already  experiencing  downward  pressure  on  their 

64 See OECD, 15 May 2014, Competition issues in the food chain industry, pp. 13 and 36. A European Commission 
report of 29 January 2016 recommends that Member States cover the whole chain for that reason (p. 5). 
65 See also Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, Falkowski, 
p. 27 and Menard, p. 69. See Agricultural Markets Task Force report, independent expert group, November 2016, 
paragraphs 125-127. See also OECD, 15 May 2014, Competition issues in the food chain industry, p. 36: “First, the 
food supply chain is a complex series of inter-related markets where competition at different stages of the supply 
chain matters for the overall functioning of the food sector. Concerns over competition may relate not just to selling 
power but also to buyer power, relating to the vertical relations between any of the stages of the food supply chain 
(retailer-processor or retailer/processor-farmer). Furthermore, how retailers compete may also have an effect on 
the overall functioning of the food supply chain.” 
66 Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, p. 24. See Annex F, 
Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member State in the 
Business-to-Business Retail Supply Chain, February 2018, p. 8. German Bundeskartellamt, Sektoruntersuchung 
(sector inquiry), Nachfragemacht im Lebensmitteleinzelhandel, September 2014 discusses the ‘waterbed’ effect (p. 
25). See also for example farmers’ reactions to changes in price relationships between retailers and manufacturers: 
Le secteur agricole s'invite dans le dossier Ahold Delhaize, https://www.lecho.be/actualite/archive/Le-secteur-
agricole-s-invite-dans-le-dossier-Ahold-Delhaize/9809168, 15 September 2016. 
67 See Dedicated Research for CIAA and AIM, Unfair commercial practices in Europe, presentation, March 2011: 
70% of the respondents consider UTPs to have a negative effect on their profitability (slide 15). 
68 In the case of fresh fruit and vegetables for example, it is not uncommon that following an order given, a producer 
organisation prepares a batch (with the required grading, packaging and labelling) for which the quantities are 
revised downwards by the buyer (a retailer or its buying subsidiary) after the batch has left the packing station (e.g. 
to take into account short term fluctuation of demand at retail stage, in a just-in-time logistic approach). This means 
that the supplier (i) has to find an alternative outlet (usually at lower price, e.g. on a wholesale market) (ii) has to 
usually regrade and repack the goods not at its own premises implying extra costs and (iii) lose freshness of the 
product. In such cases, risks (short term fluctuation of demand) and related costs are entirely passed to the supplier 
(in many cases a farmer or a producer organisation) and directly result in an income decrease. 
69 Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, see presentation of 
Gorton, Lemke and Alfarsi ‘Methodological framework: review of approaches applied in the literature to analyse the 
occurrence and impacts of UTPs’ (slide 8). 

16 

 
 
                                                 
incomes  and  a  historically  diminishing  share  of  the  added  value  accruing  to  them  in  the  food 
supply  chain70,  can  ill  afford  being  the  subject  of  UTPs.  UTPs  are  liable  to  have  significant 
consequences  in  times  of  decreasing  income  support,  increased  price  volatility  and  long-term 
trends of low commodity prices.  

In  the  2017  open  public  consultation,  94%  of  respondents  agreed  or  partially  agreed  that  such 
appreciably negative effects occurred in relation to farmers. 83% agreed they occur in relation to 
processors, 38% in relation to retail organisations, 35% in relation to retailers, 39% in relation to 
traders and 60% in relation to consumers. According to a 2013 survey of farmers and agricultural 
cooperatives,  the  estimated  damage  from  UTPs  amounted  to  EUR  10.9  billion  per  year.71  The 
cost effect on manufacturers of food products was estimated to amount to 0.5% of the turnover 
of the manufacturers participating in a survey in 201172, which would be equivalent to EUR 4.4 
billion if extrapolated to the overall food industry turnover in that year. A specific consultation 
of  undertakings  in  the  food  chain  carried  out  in  201773  showed  that  60%  of  the  respondents 
considering  themselves  suppliers  (farmers  and  processors  mainly)  stated  that  the  commercial 
significance of UTPs represent more than 0.5% of the annual turnover. The weighted average of 
the  modest  number  of  suppliers  who  accepted  to  answer  despite  the  “fear  factor”  to  such 
consultation, can indicatively be estimated at 1.5 to 1.8% of their turnover74, roughly in the same 
order of magnitude of previous surveys. While these numbers are based on perceptions, they are 
indicative of the magnitude of the problem. 

The  divergence  of  Member  States’  regulatory  approaches  to  UTPs  results  furthermore  in 
dissimilar  conditions  of  competition  for  operators.  Under  the  current  piecemeal  approach,  the 
extent  of  protection  from  UTPs  that  operators  are  granted  depends  on  the  Member  State.75 
Divergence  of  rules  is  liable  to  lead  to  differences  in  the  conditions  of  competition  and  the 
business  conduct  of  operators,  for  example  large  manufacturers  or  retailers,  which  may  be 
detrimental  to  operators  subject  to  the  rules  of  countries  with  low  UTP  protection.76  For 
illustration, in the context of one practice discussed later (payment delays), the preamble of the 
Late  Payment  Directive77  states  that  "distortions  of  competition  would  ensue  if  substantially 

70 Report on competition law enforcement and market monitoring activities by European competition authorities in 
the food sector, May 2012, paragraph 38. See also Annex C. 
71 Dedicated Research for COPA-Cogeca, Impact of unfair trading practices in the European agri-food sector, June 
2013, slide 25.  
72 Dedicated Research for CIAA and AIM, Unfair commercial practices in Europe, presentation, March 2011, slide 
12. 
73 Further details in Annex 2. 
74 See Annex 2. 
75 European Commission report, Retail market monitoring report, Towards more efficient and fairer retail services 
in the internal market for 2020, 5 July 2010, p. 7. See Irish Department of Jobs, Enterprise & Innovation, Regulatory 
Impact Analysis, 2016, Consumer Protection Act 2007, in relation to waterbed effects occurring across the border 
with UK: "Finally, such regulation might also make the sourcing of goods from outside of the State more cost 
effective for retailers/wholesalers, thereby impacting on Irish-based suppliers with knock-on effects for their 
viability, competitiveness and employment creation potential.", p. 9. 
76 See Irish Department of Jobs, Enterprise & Innovation, Regulatory Impact Analysis, 2016, Consumer Protection 
Act 2007, p. 6. See Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, 
Sexton, p. 14 and Swinnen and Vandevelde, p. 41. See also AIM (European Brands Association), 21 August 2017, 
p. 5 regretting that “some Member States do not have effective tools to tackle UTPs yet”. See also for example 
Association Française d’Etude de la Concurrence (AFEC), 2013, Green Paper reply, p. 3. 
77 Directive 2011/7/EU on combating late payment in commercial transactions. 

17 

 
 
                                                 
different  rules  applied  to  domestic  and  trans-border  operations".  Late  payments’  having  a 
negative impact on operators’ bottom line is confirmed by EuroCommerce which states that the 
reduction  in  payment  terms  due  to  the  Late  Payment  Directive  had,  in  a  number  of  countries, 
generated significant cash transfers.78 The problem perception concerning the divergence of rules 
in  Member  States  is  however  of  a  lesser  order  of  magnitude  than  that  relating  to  not  being 
afforded  effective  protection  against  UTPs  in  Member  States.  And  yet,  competition  between 
suppliers is an important characteristic of the EU food supply chain.79 

Last but not least, the absence of common rules also entails uncertainty for operators who engage 
in  trade  in  the  EU.80  The  uncertainty  concerning  the  identification  of  applicable  UTP  rules  is 
likely to increase the risk and costs linked to possible cross-border disputes, which is a problem 
in  particular  for  SMEs  with  limited  resources.81  While  UTPs  may  involve  mainly  domestic 
suppliers  and  buyers  they  also  occur  in  transnational  supply  chains.82  The  results  of  the  open 
public  consultation  in  2017  show  that  84%  of  respondents  who  believed  EU  action  on  UTPs 
should  be  taken  thought  it  would  have  positive  or  very  positive  effects  in  allowing  smoother 
commercial transactions between operators in different Member States. 24% of the respondents 
stated  that  they  were  "often  or  in  a  significant  number  of  cases"  in  a  situation  where  UTPs 
occurred in connection with cross-border trade, and 19% that this had a negative effect on their 
ability to seek redress.83 In a 2011 survey among operators in the agri-food market, 46% of the 
respondents  found  that  UTPs  have  a  negative  effect  on  access  to  new  markets  or  cross  border 
activities. More specifically, 40% said that UTPs had negative effects on their EU cross-border 
trade and 38% said that the risk of UTPs discouraged them from taking up activities outside their 
Member State of origin.84  

2.5.1.2

  Consumers 

The lack of rules governing UTPs and poor application of these rules have also been identified as 
being liable to undermine operators’ ability to invest and innovate with regard to the quality of 
products  and  services  offered.85  UTPs  can  therefore  eventually  have  negative  effects  on 

78 EuroCommerce, 17 November 2017, paragraph 34. These transfers have, in EuroCommerce’s view  – which, in 
EuroCommerce’s view has "largely benefitted large suppliers in the food supply chain, rather than SMEs". 
Economic literature also suggests that the practice of late or delayed payments has a negative impact. See Joint 
Research Center report, Unfair trading practices in the food supply chain, 2017, Falkowksi, p. 25. 
79 See Annex C, p. 14 et seq. discussing intra-EU trade. 
80 See for example Eucofel, European Fruit and Vegetables Trade Association, reply to open public consultation, 
November  2017, p. 2; Renda - Cafaggi, Study on the legal framework covering business-to-business unfair trading 
practices in the retail supply chain, final report, 26 February 2014, pp. 9 and 17. 
81 European Commission Communication, Tackling unfair trading practises in the business-to-business food supply 
chain, 15 July 2014, p. 5. Vaqué, L. G., Unfair Practices in the Food Supply Chain: A Cause for Concern in the 
European Union’s Internal Market which Requires an Effective Harmonising Solution, European Food and Feed 
Law Review, 9(5), pp. 293–302. 
82 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, p. 92. 
83 See Annex 2. 
84 Dedicated Research for COPA-Cogeca (European association of farmers and agricultural cooperatives), Impact of 
unfair trading practices in the European agri-food sector, June 2013, slide 25.  
85 European Commission report, Retail market monitoring report, Towards more efficient and fairer retail services 
in the internal market for 2020, 5 July 2010, p. 10. See also European Commission, Communication on a better 
functioning food supply chain, 28 October 2009, p. 5. 

18 

 
 
                                                 
consumers in terms of product quality and choice.86 However, evidence concerning the overall 
net impact of UTPs on consumers and innovation is inconclusive. 

The  relation  between  UTPs  and  innovation  is  two-fold.  They  can  render  innovation  more 
difficult  for  small  operators  as  they  make  them  more  vulnerable  to  any  disruption  of  their 
contracts.  For  example,  suppliers  covering  costs  for  additional  services  like  upfront  payments 
may  end  up  increasing  prices  for  consumers.87  On  the  other  hand,  it  is  argued  that  upfront 
payments can, if not disproportionate, compensate retailers for the risks taken by making space 
available to new products and may act as a signalling mechanism for consumers.88  

Several  studies  and  surveys  indicate  possible  consequences  of  UTPs  in  terms  of  lower 
investment  capacity  in  new  technologies  and  uncertainty  regarding  costs.89  In  a  survey 
performed  among  more than 400 professionals in the agri-food sector, 64%  of the respondents 
stated that UTPs created uncertainty regarding costs, 59% that they were leading to a reduction 
of  investments  for  modernisation  of  production  facilities  and  50%  that  UTPs  had  a  negative 
impact on investment in new technologies.90 In a 2011 survey, some of the agri-food suppliers 
provided an estimate of the effects that UTPs had on investment in new technologies (on average 
an  annual  reduction  of  3.4%)  and  employment  (on  average  an  annual  reduction  of  1.6%).91 
Payment  delays  are  reported  to  have  had  a  negative  impact  on  investments  undertaken  at  the 
farm  level,  particularly  in  the  context  of  countries  in  transition.92  Some  national  competition 
authorities have also "alerted against the risks of certain commercial practices that even if in the 
short  term  may  not  entail  an  immediate  anti-competitive  effect,  may  however  in  the  long  term 
undermine  the  competitive  process  of  the  food  supply  chain  or  entail  negative  effects  on 
consumer welfare by decreasing investment and innovation or reducing consumer choice."93  

According  to  Consumers  International,  inordinate  buying  power  "fosters  abusive  buying 
practices"  which  in  turn  may  ultimately  have  negative  effects  not  only  for  the  affected 

86 Bukeviciute L. et al., (2009), The functioning of the food supply chain and its effect on food prices in the 
European Union, European Economy, Occasional Paper 47, p. 20. See also German Bundeskartellamt, 
Sektoruntersuchung (sector inquiry), Nachfragemacht im Lebensmitteleinzelhandel, September 2014, p. 15. 
87 Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, Falkowski, p. 30.  
88 Idem, pp. 31-32. In the presentation of Russo in the Report of the Joint Research Center, reverse margin practices 
are understood to cover practices implying a transfer paid by the supplier to the buyer in exchange of supposed 
services. This comprises listing fees, slotting allowances, negotiation fees etc. 
89 Renda - Cafaggi, Study on the legal framework covering business-to-business unfair trading practices in the retail 
supply chain, final report, 26 February 2014, p. 116. See also the open public consultation in 2017: 62% of 
individuals and 58% of companies agreed or partially agreed that UTPs in the food supply chain have appreciable 
negative effects on consumers. For companies this ranged from 29% for retail to 90% for civil society organisations 
(48% for agriculture; 71% for agri-food sector). 
90 Dedicated Research for COPA-Cogeca (European association of farmers and agricultural cooperatives), Impact of 
unfair trading practices in the European agri-food sector, June 2013.  
91 See Dedicated Research for CIAA and AIM, Unfair commercial practices in Europe, presentation, March 2011. 
92 Dries L., The economic impact of unfair trading practices on upstream supplier. Presentation at the workshop 
“Unfair trading practices in the food supply chain” (Joint Research Center), 17 July 2017. 
93 Report on competition law enforcement and market monitoring activities by European competition authorities in 
the food sector, May 2012, p. 117. Report of the Joint Research Center, Unfair trading practices in the food supply 
chain, 2017, Swinnen and Vandevelde, p. 55. See also UK Competition Commission, The supply of groceries in the 
UK market investigation, 2008, final report, p. 12 and paragraph 38. Similar the German Bundeskartellamt, Sector 
inquiry concerning food retail in Germany, 2014, pp. 15, 24-25. 

19 

 
 
                                                 
businesses but also for consumers.94 

Both  in  the  case  of  payments  without  consideration  and  retroactive  contract  changes,  there  is 
evidence  that  the  higher  the  oligopolistic  structure  on  the  buyers’  side  and  the  higher  the 
substitutability of the products at stake (commodities), the stronger the likely negative effect on 
consumer welfare, on the variety of products and the rate of innovation.95 

The studies quoted above identify possible effects on individual suppliers. There are no studies 
identifying and quantifying effects on a whole sector or a whole market. It is not obvious that a 
given  sector  may  be  affected  negatively  overall  because  some  operators  in  that  sector  are 
negatively affected by the practices of some larger operators. The evidence about the effects of 
concentration  of  suppliers  and  retailers  is  mixed.  A  2014  study  indicated  that  increased 
concentration of suppliers had a negative effect on innovation while a strong bargaining position 
of retailers (no reference to UTPs) appears to have a positive overall impact on innovation in the 
chain.96  ECB  studies  show  that  higher  concentration  of  retailers  (including  through  buying 
alliances)  at  national  level  and  the  related  increase  in  bargaining  power  can  be  beneficial  for 
consumers as lower prices would be passed on (the study was not concerned with UTPs).97 UTPs 
may even offer short-term benefits to consumers where they lead to lower producer prices being 
passed on to consumers, thereby increasing consumer welfare. However the longer term impacts, 
in  terms  of  market  concentration  and  reduced  choice,  and  their  potential  negative  impacts  on 
consumers, are not known. Some theoretical studies examine under which circumstances lower 
purchase prices induced by UTPs are likely to be passed on to consumers.  

2.6

  What are the problem drivers? 

2.6.1 Imbalance of bargaining power 

A  significant  enabling  factor  for  the  occurrence  of  UTPs  is  that  the  food  supply  chain  is 
characterised  by  considerable  differences  of  bargaining  power  of  its  operators  (although  the 
existence  of  significant  bargaining  power  does  not  in  itself  indicate  the  abuse  of  this  power, 

94 Consumers International, The relationship between supermarkets and suppliers: What are the implications for 
consumers?, July 2012, summary, pp. 2, 4. See also three contributions to a European Commission targeted 
questionnaire to consumer associations in 2017: they concur that EU UTP rules would improve investment 
conditions of operators. 
95 Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, see presentation of 
Russo, Sorrentino and Menapace, The impacts of UTP on consumers: review of empirical studies, slide 25. See also 
Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, p. 31. The relevance of 
the downstream competition is also stressed in the sector inquiry of the German Bundeskartellamt, 
Sektoruntersuchung (sector inquiry), Nachfragemacht im Lebensmitteleinzelhandel, September 2014, p. 46. 
96 Study for DG COMP, The economic impact of choice and innovation in the EU food sector, September 2014, pp. 
37 and 222. 
97 European Central Bank, Retail market structure and consumer prices in the Euro Area, December 2014. See also 
European Central Bank, Within- and cross-country price dispersion in the Euro Area, November 2014. “Our results 
point to an overall positive and statistically significant relationship between retail market concentration at parent 
company level and prices for the pooled sample of countries […]. Therefore, we retrieve the well-established 
relation between competition and price levels: a more competitive market structure implies lower prices and 
enhances consumer welfare. Moreover, a higher degree of concentration at the buying group level tends to be 
associated with lower prices. Thus, our estimates suggest a welfare-enhancing role for buying groups, which could 
be explained in a countervailing-power framework, as a balancing mechanism between retailers' and producers' 
bargaining power, particularly in markets where the ex ante contractual strength is widely asymmetric to the benefit 
of the latter.” 

20 

 
 
                                                 
rather  it  is  undertakings’  actual  conduct  that  matters).98  This,  in  turn,  can  lead  to  the  unfair 
exercise of bargaining power to the detriment of weaker operators.99 Farmers, small processors, 
small traders or small retailers often have little bargaining power and few alternative options for 
selling  (or  buying),  while  certain  of  their  business  partners,  such  as  large  food  processors  and 
increasingly  concentrated  retailers  are  in  a  position  of  using  considerable  power  to  shape  a 
commercial  relationship.100  An  indication  and  result  of  existing  imbalances  are,  for  example, 
farm-retail  spreads  over time  (see  Annex  C)  and  the  stickiness  of  upward  moving  retail  prices 
when producer prices fall (price transmission).101 

While  agricultural  production  is  generally  highly  fragmented  and  largely  comprised  of  small 
units  in  physical  terms102,  there  are  high  concentration  levels  in  both  the  food  processing  and 
food  distribution  sectors.  This  concentration  has  generally  been  increasing  over  the  last  few 
decades  through  consolidation  in  the  food  processing  and  retailing  companies  through  natural 
growth  and  mergers,  particularly  in  the  case  of  retailers  in  the  1990s.103  Having  said  this,  the 
food  processing  sector  is  also  characterised  by  a  significant  share  of  SMEs.104  The  food 
distribution  tier  is  highly  concentrated  with  the  retail  sector  standing  out.  Food  products  are 
mostly  distributed  through  supermarkets,  hypermarkets  and  discounters,  which  account  on 
average  for  71%  of  total  packaged  food  sales  in  the  EU  Member  States.105  In  2016,  based  on 
Euromonitor  data  (not  covering  on-line  and  other  non-store  sales106),  the  CR5  (concentration 
ratio of the five largest firms) in the grocery retail sector is above 60% in half of Member States 
(above  80%  in  Sweden  and  Finland)  and  below  40%  only  in  Italy,  Bulgaria  and  Greece.  The 
food retailing sector is also characterised by the existence of numerous SMEs (over 99% of the 
enterprises representing 54% of the turn-over and 56% of total employment). More detailed data 
and trends concerning the food supply chain and the balance between its operators can be found 
in Annex C.  

2.6.2 Divergence of UTP rules at the national level 

UTPs  have  been  subject  to  a  variety  of  heterogeneous  legislative  measures  in  Member  States 

98 See voluntary Supply Chain Initiative, objective of the multi-stakeholder dialogue as mentioned in the 
introduction of Principles of Good Practice is ‘find a solution to the asymmetry and possible misuses of bargaining 
power by actors operating in the food chain”. See also European Commission, January 2016, p. 4. 
99 A large retailer’s reply to open public consultation, November 2017, p. 2. AIM (European Brands Association) 
refers to the “unbalanced bargaining power at different levels of the chain, which created the fertile environment for 
unfair trading practices.” AIM (European Brands Association), August 2017, p. 3. See Report on competition law 
enforcement and market monitoring activities by European competition authorities in the food sector, May 2012, 
paragraph 73. 
100 See OECD, 15 May 2014, Competition issues in the food chain industry, p. 13: “Concerns with competition in 
the food chain most obviously arise with respect to the levels of market concentration at food processing and 
retailing stages, resulting from a consolidation trend associated with mergers and acquisitions.” 
101 See OECD, 15 May 2014, Competition issues in the food chain industry, p. 11-12. “The concern here is that 
market power throughout the food supply chain may have contributed to this widening; this could arise from seller 
power at either or both the food processing or retailing sectors, and/or via the exercise of buyer power.” 
102 Facts and figures on farm structures, farm structures, 2017, p. 4. 
103 Swinnen J., (2015), Changing coalitions in value chains and the political economy of agricultural and food 
policy, Oxford Review of Economic Policy 31(1), pp. 90-115. 
104 Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and 
medium- sized enterprises (OJ L 124, 20.5.2003, p. 36). 
105 See Annex B, Table 1, p. 8. 
106 Non-store sales represent 2.8% of the EU retail sales of packaged food products in 2016 (source: Euromonitor). 

21 

 
 
                                                 
over  the  years.107  Annex  F  and  Annex  G  provide  an  overview  of  Member  States'  instruments 
addressing  UTPs  including  enforcement  aspects  and  show  their  heterogeneity.108  Enforcement 
modalities in Member States include, inter alia, judicial redress (in most Member States), actions 
by  competition  authorities  under  national  rules  on  unilateral  conduct  (e.g.  Spain,  Germany), 
administrative  redress  (e.g.  France),  extension  of  competition  rules  (e.g.  Germany)  and 
adjudicator systems (e.g. the UK).  

UTPs are not tackled equally in all Member States by means of mandatory rules, both as regards 
the  substance  of  protection  and  enforcement.  In  some  Member  States  or  regions  there  are 
voluntary  initiatives  which  are  the  only  governance  tools,  in  others  there  is  no  specific 
governance at all. In the absence of a common framework, there is no required minimum level of 
protection in Member States. 

2.6.3 Lack of coordination among enforcement authorities 

With no common framework in place, there is also very little coordination among enforcement 
authorities. The High Level Forum on the Better Functioning of the Food Supply Chain provides 
a  political  platform  wherein  to  discuss  ideas  but  cannot  replace  a  coordination  mechanism  of 
technically competent authorities such as, for example, the European Competition Network does 
in the field of competition rules. Such a forum facilitates exchanges of views on the  regulatory 
approaches  but  also  enable  the  gathering  and  comparing  of  data  that  allows  adopting  a 
perspective which transcends national boundaries. 

The  voluntary  Supply  Chain  Initiative  does  have  a  centralised  governing  body  and  encourages 
national  platforms.109  Although  it  has  promoted  cultural  change  concerning  UTPs  in  the  food 
supply chain and offers amicable dispute resolution options certain of its shortcomings make that 
it cannot effectively replace public enforcement (see sections 3.2 and 3.3). 

2.7

  How will the problem evolve? 

The incentives for operators with  significant  bargaining  power to  apply UTPs are not  likely to 
abate  in  view  of  the  continued  disparity  of  bargaining  power  of  operators  in  the  chain. 
Reductions  in  concentration  levels  downstream  of  primary  production  are  not  expected  on 
current  trends.110  At  current  trends,  the  degree  of  concentration  of  business  downstream  of 
primary  production,  in  particular  in  retail,  processing  and  manufacturing,  will  continue  to 
increase, subject to competition law constraints (merger control). However, also in the retail and 
processing sectors there are still many SMEs. 

By  the  same  token,  consolidation  of  agricultural  production  into  huge  corporate  farms  (which 
could restore some symmetry among parties in supply chains) will remain a very limited option, 

107 Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, Swinnen and 
Vandevelde, pp. 43-45. See also Report from the European Commission to the European Parliament and the Council 
on unfair business-to-business trading practices in the food supply chain, 29 January 2016. 
108 See also Report of the Joint Research Center, Unfair trading practices in the food supply chain, 2017, Swinnen 
and Vandevelde, p. 45: a table illustrates the different degrees of stringency of Member States’ regulatory 
frameworks including enforcement. 
109 Supply Chain Initiative, 3rd Annual report, January 2017, pp. 3 and 15. 
110 OECD, 15 May 2014, Competition issues in the food chain industry, p. 17. See also ECSIP, The competitive 
position of the European food and drink industry, February 2016, p. 146. 

22 

 
 
                                                 
due  to  social,  geographical,  and  economical  constraints.111  Reasons  inherent  in  agriculture  and 
the  food  manufacturing  basis  in  the  EU  make  it  unlikely  that  a  consolidation  process  of 
agricultural  producers  will  obviate  the  imbalance  of  bargaining  power.  In  agriculture,  scale 
economies exist but tend to be more limited than in other economic sectors: costs decrease over a 
certain size range, but then they become flat.112  

This  is  true  notwithstanding  CAP  measures  which  aim  to  help  farmers  organise  in  producer 
organisations  so  as  to  strengthen  their  bargaining  power  vis-à-vis  large  operators  in  the  food 
supply  chain.  Regulatory  exemptions  from  competition  law  for  farmers´  organisations  are  one 
tool provided for in the common market organisation regulation.113 In the fruits and vegetables 
sector,  EU  support  is  linked  to  operational  programmes  of  producer  organisations and  this  has 
improved the degree of organisation.  

Important considerations related to food security and safety, environmental sustainability of an 
activity with a strong territorial dimension and the maintenance of the rural social fabric tend to 
further limit the pace of structural change and increase in size of economic units in agriculture in 
the EU.114 

Member States’ approaches, which are not subject to any binding UTP common framework, will 
continue to diverge. It is unlikely that they will – short of such a framework – start to converge. 
So far, this has not happened. The degree of dissimilarity of conditions of competition to which 
they give rise is therefore likely to continue to exist.  

The  voluntary  Supply  Chain  Initiative  (SCI)  is  unlikely  to  develop  into  a  comprehensive 
governance  framework  that  would  make  public  governance  measures  including  enforcement 
superfluous.    As  of  today,  it  exists  alongside  national  mandatory  measures  of  Member  States. 
The SCI  constitutes an agreement among associations of operators of the food supply chain to 
promote fair business practices in the food supply chain as a basis for commercial dealings.115 It 
was  developed  within  the  framework  of  the  Commission’s  High  Level  Forum  on  the  Better 
Functioning  of  the  Food  Supply  Chain  (HLF).116  Since  its  creation  the  SCI  has  played  an 
important  role  in  Member  States  in  raising  awareness  about  UTPs  and  fostering  fairness  of 

111 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Menard, p. 84. 
112 Duffy M., Economies of Size in Production Agriculture, J Hunger Environ Nutr. 2009 July; 4(3-4), pp. 375–392. 
113 See Article 152 CMO concerning the ability of farmers to sell their production at one common price through the 
producer organisation. See also Judgment of the European Court of Justice of 13 November 2017, APVE, Case C-
671/15, paragraphs 43 et seq. 
114 President Juncker stated the EU’s agricultural sector was a strong part of the European way of life that should be 
preserved (State of the Union speech 2016). 
115 The aim of the initiative is to increase fairness in business-to-business commercial relations along the food 
supply chain. To this end, all market representatives involved in the Forum’s working party on UTPs, including 
farmers’ EU associations, jointly agreed on a set of principles of good practice in vertical relationships in the food 
supply chain in November 2011 and examples of unfair ones. Within the framework of the principles, in September 
2013 a “voluntary initiative” on fair trading practices in the food supply chain was launched in order to implement 
and enforce the principles. Since its launch in 2013, SCI has attracted 1,160 national companies – nearly 70% of 
which are SMEs – to sign up to the Principles of Good Practice and SCI commitments. 
116 The High Level Forum on the Better Functioning of the Food Supply Chain comprises Member State national 
authorities responsible for the food sector at ministerial level and representatives of the private sector. The HLF 
monitors the evolution of the SCI.  As regards the Supply Chain Initiative, the Belgium code of conduct of 2010 was 
a precursor to the Supply Chain Initiative. The so called Agro-Food Chain consultation started in 2009 in Belgium. 

23 

 
 
                                                 
business conduct.117 It provides a forum for early and non-litigious dispute resolution.118 Recent 
advances  such  as  the  designation  of  an  independent  chair  to  act  as  a  recipient  for  aggregate 
confidential complaints119 show the SCI’s ability to evolve.120  

Having said this, participation in the SCI is voluntary and the SCI does not, therefore, cover all 
operators  in  the  food  supply  chain.121  Buying  alliances  of  retailers  do  not  participate.  What  is 
more, most farmer organisations do not participate in the SCI. They did not join the SCI since, in 
their view, it did not ensure sufficient confidentiality for complaining parties and did not provide 
for  independent  investigations  and  sanctions.122  For  example,  MTK,  the  Finnish  farmers’ 
association,  pulled  out  of  the  SCI’s  national  Finnish  platform  because  of  enforcement 
concerns123 and in most Member States national farmers’ associations are not participating in the 
national  platforms  to  the  extent  they  exist124,  with  exception  of  Belgium  (Flanders),  Germany 
and the Netherlands.125 

Certain limitations of a voluntary code may be all but structural.126 The SCI has no capability of 
imposing sanctions, nor are decisions published (deterrent effect127). One-on-one disputes are not 
dealt  with  in  a  manner  that  would  ensure  confidentiality  of  complaints128,  if  only  in  the  early 

117 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, final report, revised version, p. 226. See also 
Agricultural Markets Task Force report, independent expert group, November 2016, paragraph 106.  
118 For advantages of self-regulatory dispute resolution, see SEO economisch onderzoek, Oneerlijke 
handelspraktijken, report for the Dutch ministry of economy, 2013, p. 27. 
119 Information on the procedure can be found here. 
120 See press release and Supply Chain Initiative, 3rd Annual report, January 2017, pp. 17 and 24. See also Report 
from the European Commission to the European Parliament and the Council on unfair business-to-business trading 
practices in the food supply chain, 29 January 2016, pp. 10-11.  
121 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, p. 100: “In the view of these experts, an approach 
entirely based on the willingness of the stronger party not to abuse of the weaker one is not sufficient, even in 
presence of potential image damages for the company adopting unfair behaviour.” The data collection for this 
comprehensive report included a survey which targeted operators at all stages of the food supply chain in all 28 
Member States, as well as other stakeholders (mainly associations/NGOs). A total of 1,124 completed and valid 
responses were collected. 
122 European Commission, Report from the Commission to the European Parliament and the Council, on unfair 
business-to-business trading practices in the food supply chain, January 2016, p. 8. 
123 MTK left the national Supply Chain Initiative platform in October 2015 stating that the lack of sanctioning 
possibilities “in combination with the so called ‘fear factor’ means no farmer will risk their business by putting 
forward a complaint.” 
124 There are no national platforms in Greece, Croatia, Hungary, Austria and Slovakia (under discussion). Spain and 
France are special cases.  
125  http://www.supplychaininitiative.eu/regionalnational-supporting-initiatives  
126 See section 3.3. See also European Commission, Communication from the Commission to the European 
Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, July 
2014, p. 9: “It should be recognised that there are limits to how far a self-regulatory initiative can go in providing 
for a dispute resolution mechanism.” 
127 European Commission, Report from the Commission to the European Parliament and the Council, on unfair 
business-to-business trading practices in the food supply chain, January 2016, pp. 7 and 8. 
128 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, p. 226. 

24 

 
 
                                                 
stages of the procedure, and there is no ability to carry out own initiative investigations.129 The 
concerns  about  effective  enforcement  account  for  the  continued  low  level  of  participation  of 
farmers  (and  meat  processors)  in  the  SCI.130  A  voluntary  initiative  cannot  have  of  itself  an 
impact on the fragmentation of UTP rules in Member States. 

A January 2016 survey on the application of the SCI substantiated the perceived shortcomings 
and a majority of the survey respondents considered that there was a need for a mixed approach 
to UTPs:  

“[S]urvey respondents indicated as the most preferred approaches in tackling UTPs the 
combination of voluntary initiatives and public enforcement (33% of total answers) or a 
specific  legislation  at  EU  level  (32%);  on  the  other  side,  reliance  on  voluntary 
initiatives alone at national or EU level resulted to be the less preferred approach, with 
4%  and  9%  of  preferences,  respectively.  [...]  the  key  aspect  […]  is  whether  the  ‘soft’ 
(voluntary, self-regulatory) approach of  the SCI  – basically subject to the goodwill of 
the  stronger  parties to  cooperate  with  the  weaker  ones  –  can  be  enough  to  effectively 
address, by itself, the issue of UTPs in the food supply chain, also taking into account 
that the deterrent of potential sanctions applied by the SCI in case of unfair behaviour 
appears to be limited.”131  

The study concluded that:  

“elements  from  the  reviewed  literature,  insights  from  interviewed  stakeholders  and 
independent  experts,  and  the  clear  preference  expressed  by  survey  respondents  for 
‘specific  legislation  at  EU  level’  or  for  a  ‘combination  of  voluntary/self-regulatory 
initiatives  and  public  enforcement’,  lead  the  study  team  to  conclude  that  a  mixed 
system,  envisaging  self-regulatory  schemes  enforced  by  an  independent authority  with 
wide  powers  (e.g.  the  possibility  to  promote  investigations  ex  officio  and  to  consider 
also confidential complaints), within a general regulatory framework provided by EU-
level  specific  guidelines  or  provisions,  would  constitute  an  approach  which  combines 
effectiveness with the acceptance of stakeholders.”132  

In  the  open  public  consultation,  75%  of  respondents  were  of  the  opinion  that  the  SCI  was 
insufficient in and of itself to address UTPs. 

Digitalisation  presents  opportunities  (‘smart  farming’)  and  challenges  for  farmers.  It  increases 
transparency and ease of communication, i.e. farmers can more easily find out what prices others 
are paid or exchange experiences among themselves.  

Moreover,  internet  platforms  can  present  additional  outlets  for  fresh  and  processed  food 

129 Ibidem. European Commission, Report from the Commission to the European Parliament and the Council, on 
unfair business-to-business trading practices in the food supply chain, January 2016, p. 9. See also European 
Parliament resolution on unfair trading practices in the food supply chain, 7 June 2016, point Y. 
130 See Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Swinnen and 
Vandevelde, p. 50, referring to Gentile: “In any case, whatever legislation the European Commission decides to 
introduce it will have to take the ‘fear factor’ into account more than the current Supply Chain Initiative is doing 
(Gentile et al., 2016).”  
131 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, pp. 92 and 229. 
132 Idem, p. 21. 

25 

 
 
                                                 
products.133 Their transformative impact on the marketing of fresh produce is less evident than it 
has been the case in other sectors of the economy.134 The longer-term impact of the internet in 
terms  of  fostering  short  supply  chains  and  direct  marketing  of  food  products  to  consumers  is 
difficult to predict. The logistics and costs of home-delivery of fresh produce are challenging.135 
It  remains  to  be  seen  whether  online  platforms  can  alleviate  the  lack  of  bargaining  power  of 
weaker  operators  in  the  chain  or  whether  greater  imbalances  are  looming  should  even  greater 
concentration  of  demand  and  oligopoly  power  occur  through  network  effects  in  the  platform 
business.136  

2.8

  Prior evaluations 

As there is no EU legislative framework to address UTPs yet, it is not possible at this stage to 
present  an  evidence-based  evaluation  on  how  EU  measures  perform.  However,  some  Member 
States  have  performed  ex  ante  or  ex-post  evaluations  with  respect  to  the  effectiveness  and 
efficiency of the UTP policies. Information from these evaluations is being referred to in section 
6.2.1.  

3  Why should the EU act? 

3.1

  Legal basis for EU action  

A key objective of the CAP is to ensure a fair standard of living for the agricultural community 
(Article  39  TFEU).  Pursuit  of  the  objective  of  ensuring  a  fair  standard  of  living  for  the 
agricultural community should be balanced with the other objectives listed in Article 39 TFEU 
and, in particular, with the aim to ensure reasonable prices for consumers. For example higher 
prices  for  operators  in  the  food  supply  chain  may  ultimately  raise  prices  for  consumers.  The 
EU’s  constitutional  emphasis  on  producer  welfare  which  co-exists  with  the  objective  of 
reasonable  consumer  prices  is  unique  to  the  agricultural  sector  hinting  at  the  comprehensive 
responsibility of the CAP for European agriculture. 

Article 43 TFEU specifies that the common market organisation shall ensure conditions for trade 
within the Union "similar to those existing in a national market". In a national market one would 
expect  uniform UTP rules.  Article 40 TFEU stipulates furthermore that the European common 
market  organisation  ought  to  exclude  discrimination  between  agricultural  producers  (or 
consumers) within the Union.  

The patchwork of UTPs rules or the respective absence of UTP rules in Member States is liable 
to impair the objective of ensuring a fair standard of living for the agricultural community. UTPs 
jeopardise  the  profitability  of  farmers  and  lead  to  downward  pressure  on  their  market  income. 
Their governance falls therefore within the CAP’s remit.  

133 Amazon operates Amazon Fresh in a few cities via an online platform. 
134 In June 2016, Amazon bought the grocery chain Whole Foods for USD 13.4 billion.  
135 The total value of grocery sales in U.S. is roughly USD 800 billion per annum. The online share of U.S. grocery 
sales is only 1-2% currently, but expected to double by 2021 from USD 14.2 billion to USD 29.7 billion. The value 
of online sales of packaged food products in the EU is about 2.3% in 2017 (~1.5% in 2012) of total sales.  
136 Empfehlung der Wettbewerbskommission zum Thema "code of conduct" für Lieferanten – 
Abnehmerbeziehungen im Lebensmitteleinzelhandel, Österreich, 3 July 2017, p. 2 

26 

 
 
                                                 
Based on the general rationale for the CAP as laid down in the Treaty, the absence of a common 
UTP framework137 is a consequential gap, marking a distinct contrast to other areas with direct 
relevance for operators such as competition rules138, state aid rules and marketing standards. In 
the  said  areas,  the  common  market  organisation  (Regulation  (EU)  No  1308/2013)  lays  down 
common rules relevant to the competitive conditions of operators in the EU so as to contribute to 
economic and social cohesion139, as well as to a level playing field in the single market.140 The 
protection of a well-functioning internal market ensuring a level playing field for all producers 
across the EU is acknowledged to be a ‘key asset’ of the CAP.141 

According  to  Article  38(2)  and  (3)  TFEU  the  CAP  primarily  covers  the  agricultural  products 
listed in Annex 1 to the TFEU. However, the European Court of Justice has explicitly confirmed 
that  food  products  not  listed  in  Annex  I  TFEU  (Annex  I  products  are  deemed  “agricultural 
products”  under  the  Treaty)142  can  be  covered  by  acts  adopted  under  Article  43  TFEU  if  this 
contributes to the achievement of one or more of the CAP objectives and agricultural products 
are principally covered.143  

Moreover, an approach which protects agricultural producers and their associations (cooperatives 
and producer organisations) also must take into account indirect negative effects they may suffer 
through UTPs occurring downstream in the food supply chain but being passed - in terms of their 
negative effect - through to them, i.e. normally by operators who are not agricultural producers 
but whose weak bargaining position in the chain makes them vulnerable to UTPs. SME operators 
negatively  affected  in  their  bottom  line  by  the  exercise  of  UTPs  in  the  food  supply  chain  are 
unlikely to be able to simply absorb such costs. They will pass them on to their trading partners 
such  as  farmers  who  often  are  their  upstream  suppliers  and  do  not  normally  have  sufficient 
bargaining  power  to  resist  such  pressure. Protection  against  UTPs  applying  also  downstream 
would furthermore prevent  unintended consequences on farmers due to trade  being diverted to 
their  small  investor-owned  competitors  -  e.g.  at  the  processing  stage  -  which  would  not  enjoy 

137 The Common market organisation rules in this area are, so far, limited to the possibility for Member States to 
introduce an obligation of written contracts between producers and processors concerning agricultural products and 
cover the required contents of such contracts (see Article 168 of the common market organisation regulation).  
138 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, p. 43. Swinnen and 
Vandevelde describe this as taking a further step in the direction of a more complete common market where unfair 
competition would be reduced.  
139 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Menard, p. 74: "Indeed, 
beside their role in guaranteeing or trying to restore ‘the right conditions’ for markets to run smoothly (Sexton), 
economic policies are also about keeping or restoring socioeconomic cohesion, which may facilitate coordination 
and improve performance along the supply chain." 
140 The European Court of Justice has held that the maintenance of effective competition is one of the objectives of 
the CAP, together with objectives listed in Article 39 TFEU such as ensuring a fair standard of living for the 
agricultural community. Judgment of the European Court of Justice of 13 November 2017, APVE, Case C-671/15, 
paragraph 48. The common market organisation may include all measures required to attain the objectives of the 
CAP: See for instance European Court of Justice, Judgment of 23 December 2015, Case C-333/14, Scotch Whisky, 
paragraph 14. 
141 Reflection Paper on the Future of EU Finances, 28 June 2017, p. 24. This also applies to the common fisheries 
policy. 
142 Food products are agricultural products listed in Annex I TFEU and processed agricultural products (PAPs) 
which are listed in Regulation (EU) No 510/2014. Agricultural products in the narrow legal sense are the products 
listed in Annex I TFEU (Annex I also covers many processed agricultural products de première transformation). 
There are several regulations based on Article 43 TFEU which cover PAPs. For example, the organic Regulation 
(EC) No 834/2007 inter alia covers PAPs which have food use (Article 1(2)(b)). 
143 Judgment of the European Court of Justice, C-343/07, 2 July 2009, paragraphs 50-51. 

27 

 
 
                                                 
protection (e.g. less legal risk for purchasers to be confronted with UTP claims).  

In  light  of  the  foregoing,  Article  43  TFEU,  which  entrusts  the  Union  legislator  with  the  legal 
powers  to  establish  a  common  organisation  of  agricultural  markets  in  the  EU,  can  in  principle  
serve  as  the  legal  basis  for  measures  covering  UTPs  occurring  in  the  food  supply  chain  in 
relation to the trade of food products which originate with agricultural producers.  

3.2

  Subsidiarity: Necessity of EU action 

As  has  been  shown,  no  common  EU  framework  exists  which  would  provide  a  minimum 
European  standard  of  protection  by  approximating  or  harmonising  Member  States’  diverging 
UTP measures. In the absence of a minimum standard, certain Member States have no rules on 
UTPs.  Others  do  not  address  important  aspects  of  effective  UTP  enforcement.  This  leads  to 
under-protection of vulnerable operators, in particular agricultural producers, against UTPs in the 
EU.  Moreover,  in  spite  of  its  positive  effects  in  the  area  of  private  governance  of  UTPs,  the 
voluntary codes including the Supply Chain Initiative (SCI) - to the extent it applies in Member 
States – is not able to effectively replace public governance measures.  

From  this  follows  the  need  for  EU  legislation  which  would  target  the  problem  of  under-
protection against UTPs by providing for a common minimum standard of protection in the EU.  
After years of discussion, analysis and recommendations, which have improved the situation on 
the ground only to a certain extent, EU legislation is a means that can ensure brining about such 
a minimum protection throughout the EU including the enforcement and coordination aspects. 

Farther reaching national UTP rules and voluntary codes like the SCI would not be replaced. An 
EU framework could thus lead to synergies rather than the cancelling out of the advantages of 
these regimes. 

Short  of  EU  measures,  Member  States  lack  coordinative  mechanisms  to  bring  about  such 
approximation,  nor  do  they  have  obvious  incentives  to  self-align.  Measures  at  the  EU  level, 
complementary to Member States regimes and the SCI, could consist in common UTP rules that 
would  aim  at  improving  the  governance  of  the  food  supply  chain  and  pursue  the  objective  of 
ensuring fair living standards of the agricultural community (Article 39 TFEU). A circumspect 
approach  could  for  instance  take  the  form  of  partial  harmonisation  to  introduce  a  minimum 
protection  and  take  the  positive  effects  of  market  driven  contractual  arrangements  between 
parties into account. As UTPs occur along the food supply chain and have repercussions that are 
likely  to  be  passed  through  to  farmers  it  makes  sense  to  address  them  in  a  comprehensive 
manner, that is to say to conceive of measures which apply along the chain.  

3.3

  Subsidiarity: Added value of EU action 

The  European  Commission  published  a  report  in  January  2016  that  concluded  that  given  the 
positive developments regarding UTPs in parts of the food supply chain there was no need to act 
at the EU level at that stage.144 However, this assessment was based on the expectation that the 
observed  positive  developments  would  continue,  and  in  its  report  the  Commission  identified  a 
number of areas in Member States’ UTP legislation that needed further improvement. Regarding 
the voluntary Supply Chain Initiative, the report likewise acknowledged the benefits achieved so 
far, but also suggested a number of measures to improve the initiative further so that no specific 

144 See footnote 11. 

28 

 
 
                                                 
harmonised  regulatory  approach  at  EU  level  becomes  necessary.  In  this  context,  the  European 
Commission committed to re-assess the need for and added value of EU action to address UTPs 
in the light of subsequent developments – or a lack of further improvements – before the end of 
its mandate (see Table below).  

As regards Member States’ regimes, the report included suggestions in five key areas to enhance 
Member States’ regulatory frameworks:  

(1) Member States’ regimes should cover the whole food supply chain as well as operators 
from non-EU countries;  

(2) Member States should exchange information and best practices concerning their national 
legislation and experience of enforcement in a coordinated and systematic way in order to 
improve  the  common  understanding  which  specific  types  of  business  practice  should  be 
considered UTPs;  

(3) Member States should review their approach to UTPs  – those 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  –  those  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;  

(4)  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. Member States without 
any recent enforcement cases should review their national situation;  

(5)  Member  States  should  have  sanctions  that  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). A penalty 
may also be to ‘name and shame’, for example by publishing the name of the company that 
was found guilty. 

Although  some  progress  has  been  made  on  these  recommendations,  there  remain  significant 
shortcomings:  

As  regards  the  first  recommendation,  although  20  Member  States  have  introduced  UTP 
legislation,  8  Member  States  have  no  UTP  legislation.  Moreover,  certain  Member  States 
which  have  legislation  do  not  cover  the  whole  food  supply  chain  (Hungary,  Latvia, 
Lithuania, Romania and the UK).145  

As regards the second and fourth recommendation related to exchanges of information and 
best  practices,  the  recommendations  have  been  partially  followed  up  by  meaningful 
exchanges between Member States in the High Level Forum for a Better Functioning Food 

145 See Annex G, Cafaggi and Iamiceli, Overview on “Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, Overview Table 2.1 "Modes of regulation 
and prohibited unfair practices: legislative texts". 

29 

 
 
                                                 
Supply  Chain  in  2016  and  2017,  often  at  a  political  level.146  However,  the  HLF  is  no 
substitute  for  a  specialised  network  consisting  uniquely  of  national  authorities  that  would 
more effectively facilitate the exchange of technical information and best practices between 
the  enforcement  authorises.  In  the  absence  of  a  common  framework  for  enforcement 
authorities  to  discuss  UTPs,  the  Commission  lacks  a  proper  legal  tool  to  facilitate  such 
coordination between Member States.  

As  regards  the  third  recommendation  on  policy  reviews,  Member  States  were  asked  in  a 
recent  stakeholder  consultation  to  update  information  that  was  collected  from  them  on  the 
basis  of  a  questionnaire  sent  in  2015  on  the  existence  of  UTP  legislation,  implementation 
and  enforcement  and  to  inform  about  impact  assessments  that  their  authorities  may  have 
carried  out  before  deciding  on  national  UTP  rules  or  evaluations.147  According  to  the 
information received, only three Member States had carried out ex ante evaluations and one 
Member State (UK) an ex-post evaluation thus reviewing its UTP legislation. 

As  regards  the  fifth  recommendation  on  sanctions,  ,  Member  States  that  regulate  UTPs 
include in their legislation financial penalties in the form of fines; some also add injunctions 
and declaratory decisions.148 As regards fines, the variations in the different Member States 
are  noteworthy  both  as  regards  thresholds  (minimum  and/or  maximum)  and  the  possible 
amount  of  possible  fines.149  As  regards  fining  practices  there  is  no  reliable  study  but 
anecdotal evidence suggests that strong variations occur across Member States.150 There is 
also  no  clear  evidence  on  the  effectiveness  of  Member  States’  approaches  to  fines  and 
financial  penalties  in  the  food  supply  chain.151  The  possibility  to  publish  outcomes  of 
investigations may have a significant deterrent effect but only 10 Member States provide for 
such a possibility.152 Consequently, the indications are that for the time being the situation in 
respect  of  important  enforcement  parameters  continues  to  be  heterogeneous  in  Member 
States.153 

As regards the recommendation in the report’s conclusions that Member States without UTP 
legislation could consider following the example of Belgium and the Netherlands that do not 
have  a  regulatory  framework  but  have  opted  for  national  voluntary  platforms,  since  2016 
two new national platforms were created, namely in Estonia and Poland (farmers are not part 
of the Polish platform). Estonia is one of the Member States without UTP legislation, Poland 
recently  introduced  UTP  legislation.  At  present,  there  are  still  Member  States  that  have 
neither  introduced  UTP  legislation  nor  created  a  national  voluntary  framework  (i.e. 
Denmark, Sweden, Luxembourg and Malta).  

146 The Forum comprises national authorities responsible for the food sector at ministerial level and representatives 
of the private sector and is chaired by three Commissioners. Its mandate covers the following areas: 
Competitiveness and SME policy, Business-to-business trading practice, Internal Market, Trade and market access, 
Sustainability, Social dimension, Innovation, Food Price Monitoring Tool.  
147 See Annex 2. 
148 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, pp. 32-33. 
149 See Annex G, Cafaggi and Iamiceli, p. 30, Table n. 11: Minimum and maximum threshold for the imposition of 
fines (examined UTP legislation). 
150 See Annex F, Cafaggi and Iamiceli, p. 32. 
151 Idem, p. 33. 
152 Ibidem and Annex G, Table 11-bis, Publication of enforcement decisions administrative authorities, p. 35. 
153 See Annex F, Cafaggi and Iamiceli, pp. 18-36. 

30 

 
 
                                                 
As regards the Supply Chain Initiative, the Commission concluded that in order to increase the 
initiative’s  credibility  and  effectiveness  in  tackling  UTPs  a  discussion  with  the  relevant 
stakeholders on how to improve the SCI under the High Level Forum for a Better Functioning 
Food Supply Chain should take place. The objective should be 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.  

While in the meantime the SCI has introduced an independent chair as well as confidentiality for 
aggregated complaint procedure,154 it has failed to grant investigatory and sanctioning powers to 
independent  bodies155,  which  would  be  of  significant  importance  for  effective  enforcement.156 
Moreover,  it  does  not  seem  that  the  SCI  has  plans  to  integrate  such  powers  into  its  voluntary 
arrangement  as,  in  its  3rd  Annual  Report,  it  refers  to  civil  law  and  courts  in  this  respect  (the 
disadvantages of which are discussed in section 2.4 and  Annex B). Indeed, concerns about the 
lack  of  effective  enforcement  are  the  reason  why  EU  farmer  representative  organisations  have 
not joined the SCI. In November 2017, FoodDrinkEurope, a founding member of the SCI, stated 
in reaction to the public consultation that “it [was] essential for an action at EU level to tackle 
unfair commercial relations that occur along the entire food chain.” In conclusion, the SCI has 
been able to only partially followed up on the Commission’s recommendations and the steps that 
have not been taken are material.  

It can therefore be concluded that Member States did not follow up on most of the Commission’s 
recommendations from January 2016. Similarly, also the SCI has only partially followed up on 
the  recommendations.  The  absence  of  a  satisfactory  follow-up  of  the  Commission’s 
recommendations  means  that  the  situation  of  under-protection,  which  has  been  described  in 
section 2, continues to exist. After having tried, through the recommendations made (including 
in  the  2014  Communication),  without  full  success  to  achieve  the  said  outcomes  so  as  to 
effectively  address  UTPs,  it  follows  that  at  this  stage  a  legislative  proposal  at  the  EU  level 
implies clear added value. Such a proposal would aim to address the shortcomings established in 
section 2 and also alluded to in this section.  

154 SCI, 3rd Annual report, January 2017, p. 11: as regards the SCI’s dispute resolution 43 companies reported 
having been faced with an alleged breach of at least one of the Principles of Good Practice since 1st September 
2015. 13 were not solved informally, as a result of which 3 companies lodged a total of 4 complaints. 30 were 
solved informally. 
155 Idem, p. 17.  
156 See also European Commission Communication, Tackling unfair trading practises in the business-to-business 
food supply chain, 15 July 2014, p. 12, suggestions 9 and 10. 

31 

 
 
 
                                                 
Situation in 2016 

Commission recommendation 

Expected situation 

Situation in 2018 

Change compared to 2016 

Not all MS regimes covered the 
whole food supply chain, neither 
operators from non-EU 
countries.  
MS did not exchange 
information and best practices in 
a coordinated and systematic 
way.  

MS’ regimes should cover the whole 
food supply chain as well as 
operators from non-EU countries.  

MS should exchange information 
and best practices in a coordinated 
and systematic way.  

All MS’ regimes cover the 
whole food supply chain as well 
as operators from non-EU 
countries.  
All MS exchange information 
and best practices in a 
coordinated and systematic way.  

MS had not reviewed their 
approach to UTPs.  

MS should review their approach to 
UTPs. 

All MS have reviewed their 
approach to UTPs.  

Not all MS regimes cover the 
whole food supply chain, neither 
operators from non-EU 
countries.  
To some extent, MS exchange 
information and best practices 
happens in the High Level 
Forum on the Better 
Functioning of the Food Supply 
Chain.  
Only four MS have reviewed 
their approach to UTPs.  

Most MS lacked sanctions that 
acted as a real deterrent.  

Not all MS had UTP legislation 
in place.  

Awareness of the SCI was 
insufficient, the impartiality of 
its governance structure was not 
ensured, alleged victims of 
UTPs could not complain 
confidentially and no 
investigatory and sanctioning 
powers were granted to 
independent bodies.  

All MS have sanctions that act 
as a real deterrent. 

MS should have sanctions that act as 
a real deterrent. 

Not all MS have sanctions that 
act as a real deterrent; the 
situation continues to be 
heterogeneous.  
Not all MS have UTP legislation 
in place, or have a national 
voluntary platform.  
Awareness of the SCI improved, 
the SCI has introduced an 
independent chair; victims of 
UTPs can complain 
confidentially collectively (if 
not individually); the SCI has 
failed to grant investigatory and 
sanctioning powers to 
independent bodies.  
Table 2: Changes regarding the governance of UTPs between 2016 and 2018 

MS have UTP legislation or an 
effective national voluntary 
platform in place. 
Awareness of the SCI is 
sufficiently high, especially 
among SMEs, the SCI has an 
impartial governance structure, 
alleged victims of UTPs can 
complain confidentially, and the 
SCI has granted investigatory 
and sanctioning powers to 
independent bodies.  

MS should put UTP legislation in 
place or opt for a national voluntary 
platform.  
The SCI should raise awareness of 
itself, it should ensure impartiality 
of its governance structure, it should 
enable alleged victims of UTPs to 
complain confidentially, and it 
should grant investigatory and 
sanctioning powers to independent 
bodies.  

The expectation of contin-
ued improvement of MS’ 
UTP regimes did not 
materialise.  
Situation improved but 
realisation that means to 
bring about technical 
coordination of MS 
enforcement authorities is 
lacking.  
The expectation of MS 
reviewing their approaches 
to UTPs did not hold.  
The expectation of a 
convergence of effective 
sanctions did not hold.  

The expectation that all MS 
establish effective UTP 
regimes did not hold.  
The expectation that the 
SCI fully follow up on the 
Commission’s recommend-
ations did not materialise.  

32 

 
 
Last but not least, politically relevant events occurred since January 2016157:  

-  The European Parliament invited the European Commission in a resolution of June 2016 to 
submit  a  proposal  for  an  EU-level  framework  concerning  UTPs,  welcoming  “the  steps 
taken by the Commission to combat UTPs with a view to securing a more balanced market 
and  to  overcoming  the  current  fragmented  situation  resulting  from  the  different  national 
approaches to addressing UTPs in the EU”, but – based on its own analysis and political 
assessment – pointing out that “these steps are not sufficient to combat UTPs”.  

-  The  European  Economic  and  Social  Committee  published  a  report  in  September  2016 
calling upon the Commission and the Member States to take swift action to prevent UTPs 
by  establishing  an  EU  harmonised  network  of  enforcement  authorities,  so  as  to  create  a 
level playing field within the single market. 

-  The report of the Agricultural  Markets  Task Force of November 2016 recommended  EU 

legislation in the areas of UTPs for agricultural products. 

-  The Council invited the Commission in December 2016 to undertake, in a timely manner, 
an impact assessment with a view to proposing an EU legislative framework or other non-
legislative measures to address UTPs, underlining “the importance of a level-playing field 
for all actors in the food supply chain across the EU that could be achieved by a common 
legislative framework on UTPs”. 

In the light of the foregoing, the added value of EU action consists in being able to provide for a 
mandatory  minimum  protection  standard  against  UTPs 
including 
enforcement, a standard which the voluntary initiatives and national measures have not or only to 
a  limited  extent  been  able  to  bring  about.  This  would  address  the  problem  of  under-protection 
against  UTPs and  have a deterrent effect on their  occurrence.  The complementary character of 
EU  measures  in  relation  to  existing  voluntary  and  Member  States  rules  would  respect 
subsidiarity and may have a reinforcing impact. 

throughout 

the  EU 

96% of the respondents to the 2017 public consultation on the modernisation of the CAP agreed 
with  the  proposition  that  improving  farmers’  position  in  the  value  chain  including  addressing 
UTPs should be an objective of the EU’s Common Agricultural Policy.  

157 See references in section 1.2 above.  

33 

 
 
                                                 
4  Objectives: What is to be achieved? 

Figure 2: schematic overview of the problems and objectives 

4.1

  General objectives 

EU UTP rules  would  – as  do UTP rules in Member States and  those of voluntary initiatives  – 
aim at deterring and sanctioning unfair behaviour rather than remedying the structural imbalance 
of  bargaining  power  between  operators  in  the  food  supply  chain.  The  latter  is  beyond  this 
initiative’s remit. Having said this, encouraging agricultural producers to self-organise and thus 
strengthen their bargaining power in relation to downstream operators is part of the CAP and the 
2013  reform  has  introduced  enhanced  policy  measures  in  that  regard.  One  would  hope  that 
farmers make increasing use of these possibilities. 

The present initiative aims to reduce the occurrence of unfair trading practices in the food supply 
chain by introducing a common framework ensuring a (minimum) standard of protection across 
the EU. This framework would apply alongside existing rules in Member States, including those 
of voluntary character. Prohibitions would aim to influence behaviour of operators by outlawing 
unfair  practices  and  providing  for  effective  redress  possibilities  in  case  they  occur  nonetheless 
(deterrent  effect).  Operators  could  expect  a  common  set  of  minimum  rules  regardless  of  the 
Member  State  they  happen  to  be  based  in  or  trade  into.  While  according  to  a  2017  study  a 
correlation  between  the  stringency  of  national  UTP  regulation  and  its  effectiveness  cannot  be 
shown158, surveys  and the results of the open public consultation suggest  that operators expect 
EU UTP regulation to have positive effects.159 

UTP  rules  would  also  reduce  the  degree  of  regulatory  dissimilarity  shaping  commercial 
conditions and thus make a contribution to levelling the competitive playing field. By the same 
token, EU measures should increase legal security for operators engaging in cross-border trade. 
They  would  also  contribute  to  reducing  transaction  costs,  although  in  the  absence  of  full 
harmonisation undertakings would still have to take regulatory differences into account. 

158 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Swinnen and Vandevelde, 
p. 46. 
159 See Annex 2, section 2.2.b. 

34 

Specific objectivesGeneral objectivesProblemsOccurrenceof unfair trading practices Under-protection against UTPsContribute to level playing field Enable effectiveredressReduce occurrence of UTPsStrengthen resilience of weaker operators in the food supply chain, in particularfarmersImprovefunctioning of the food supply chainContribute to the CAP goals of  fair standard of living for people engaged in agriculture and providing for similar conditions for trade 
 
 
                                                 
Introducing minimum and effective enforcement requirements that address the fear factor would 
contribute to ensuring effective redress possibilities for operators against infringements of UTP 
rules.  The  absence  of  coordination  among  Member  States’  enforcement  authorities  would  be 
addressed by introducing coordination of enforcement authorities. 

4.2

  Specific objectives 

Achieving  the  specific  objectives  would  contribute  to  one  or  several  of  the  general  objectives. 
All  specific  objectives  relate  to  the general  objective  of  improving  the  functioning  of  the  food 
chain, based on the understanding that unfair trading practices are not part of but an impediment 
to an efficiently functioning food supply chain.  

Pursuing  the  special  objectives  of  reducing  the  occurrence  of  UTPs  and  enabling  effective 
redress  would  help  strengthen  the  resilience  of  weaker  operators  in  the  chain,  in  particular  of 
agricultural producers. UTP rules would enable addressing one element which exacerbates price 
and  income  variability  in  agriculture.  This  would  therefore  contribute  to  maintaining  a  fair 
standard  of  living  of  farmers,  a  general  objective  of  this  initiative  and  one  of  the  five  CAP 
objectives listed in Article 39 TFEU (ensuring reasonable consumer prices is another of the CAP 
objectives). Last but  not least, achieving  a more level  playing  field  would  aim to  contribute to 
ensuring similar conditions for trade for operators in the EU.   

4.3

  Consistency with other EU policies 

It has been shown before how UTP rules would be a logical part of the overall orientation of the 
Union’s Common Agricultural Policy which pursues producer welfare and would provide for a 
common set of minimum rules for operators who produce and trade agricultural products.  

UTP rules are compatible with and complementary to the EU’s competition rules. Competition 
law has  a scope  which is different from rules  on unfair  trading  practices.160 Article  102 TFEU 
(abuse  of  dominance)  is  concerned  with  exclusionary  or  exploitative  practices  by  dominant 
companies.  Article  101  TFEU  targets  agreements  between  undertakings,  decisions  by 
associations  of  undertakings  and  concerted  practices  which  may  affect  trade  between  Member 
States  and  which  have  as  their  object  or  effect  the  prevention,  restriction  or  distortion  of 
competition  within  the  internal  market.  UTPs  do  not  normally  imply  an  infringement  of 
competition  rules  but  involve  unequal  bargaining  power  and  prohibit  undertakings  from 
imposing  on  their  trading  partners,  obtaining  or  attempting  to  obtain  from  them  terms  and 
conditions that are unjustified, disproportionate or without consideration.161 The initiative would 
take  into  account  the  interests  of  consumers  alongside  those  of  producers  as  provided  for  in 
Article 39 TFEU (see section 9).  

The  focus  on  effective  enforcement  is  shared  with  other  policy  fields.  A  recent  Commission 
proposal  suggests  empowering  the  national  competition  authorities  to  improve  enforcement, 
thereby  contributing  to  a  better  application  of  the  EU  competition  rules.162  In  its  2016 

160 See also Annex B, p. 2. 
161 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition 
laid down in Articles 81 and 82 of the Treaty, recital 9. 
162 On 22 March 2017, the Commission has proposed minimum enforcement guarantees and standards to empower 
national competition authorities to reach their full potential when applying EU competition law, in particular pp. 3-
4. 

35 

 
 
                                                 
Communication “Better results through better application”, the Commission also emphasises the 
importance of effective enforcement systems in Member States.163 

Fairness  in  market  activities  in  the  business-to-business  context  is  the  specific  objective  of 
Directive  2006/114/EC,  which  deals  with  misleading  practices  and  the  requirements  of 
comparative  advertising.164  The  provisions  set  forth  in  the  Directive  are  limited  to  advertising 
practices and do not generally address the business-to-business trading practices identified in this 
impact assessment report. 

Regulatory divergence of a kind similar to UTPs has given rise to EU initiatives in the area of 
business-to-consumers protection.165 Some Member States have extended such rules to national 
business-to-business  situations.166  The  so-called  injunctions  directive  ensures  the  defence  and 
enforcement  of  collective  interests  of  consumers  in  the  internal  market.167  The  conceptual 
approach under the EU’s business-to-consumer rules indeed shares relevant characteristics with 
Member  States’  existing  UTP  rules  governing  business-to-business  transactions,  namely  the 
focus  on  relatively  weaker  parties  of  a  commercial  transaction.  In  certain  Member  States  the 
same enforcement authority is mandated to pursue both types of cases.168  

The  EU  is  committed  to  high  standards  of  fundamental  rights.  A  fair  and  effective  system  of 
protection against UTPs will contribute to stakeholders’ ability to conduct a business (see Article 
16 Charter of Fundamental Rights of the European Union {CFR}). Union legislation will respect 
the rights enshrined in the Charter (Articles 51, 52 CFR). Enforcement powers therefore have to 
be shaped in a manner compatible with the rights of defence (Article 48 CFR), e.g. by providing 
an  effective  remedy  against  the  decision  of  an  enforcement  authority  imposing  penalties.  In 
particular for the confidential treatment of complaints a balance must be struck in relation to the 
rights of defence.169 Rules on professional secrecy, which is a right protected by the Charter170, 
have been developed in other areas of EU legislation, namely competition law and would apply 

163 Communication from the Commission - EU law: Better results through better application. 
164 Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning 
misleading and comparative advertising. 
165 See Directive 2005/29/EC on unfair commercial practices and Directive 93/13/EEC on unfair terms in consumer 
contracts. Recital 8 of the Directive reads: "It is understood that there are other commercial practices which, 
although not harming consumers, may hurt competitors and business customers. The Commission should carefully 
examine the need for Community action in the field of unfair competition beyond the remit of this Directive and, if 
necessary, make a legislative proposal to cover these other aspects of unfair competition." Some Member States 
extend EU rules on unfair business-to-consumer commercial practices to the business-to-business relationships. 
166 See Report from the European Commission to the European Parliament and the Council on unfair business-to-
business trading practices in the food supply chain, 29 January 2016, p. 3 (Austria, Denmark, France, Germany, 
Italy and Sweden). 
167 Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the 
protection of consumers' interests. See also Regulation (EC) No 2006/2004 of the European Parliament and of the 
Council of 27 October 2004 on cooperation between national authorities responsible for the enforcement of 
consumer protection laws. 
168 See for example Italy, where the Antitrust Authority is responsible for Competition, UTPs and Consumer 
Protection. Renda - Cafaggi, Study on the legal framework covering business-to-business unfair trading practices in 
the retail supply chain, final report, 26 February 2014, p. 187 and http://www.agcm.it/en/general-information.html  
169 European Court of Justice, judgment in Case C-450/06, paragraphs 45-46.  
170 Orders of the President of the General Court in Case T-462/12, paragraph 44 and Case T-345/12, paragraph 32. 

36 

 
 
                                                 
here as well.171 

5  What are the available policy options? 

5.1

Introduction  

Any  regulation  of  UTPs  will  cover  legal  and  practical  issues  that  can  be  addressed  very 
differently and that can have  different  impacts on the food supply  chain and the related policy 
objectives. This section presents and explains plausible alternatives for how these issues can be 
addressed  in  the  legislation.  The  elaboration  of  the  policy  options  helps  to  understand  the 
consequences  of  the  choices  for  the  food  supply  chain  and,  in  particular  for  the  occurrence  of 
UTPs, the levelling of the playing field and the possibility of seeking effective redress.  

First, there is the question whether UTPs should be addressed at the EU-level at all and, if so, to 
what extent (section 5.2). Second, the question arises if a possible regulation of UTPs at EU level 
should be based on general principles or focus on specific practices (5.3). UTP rules can cover 
only agricultural products or all food products, that is to say also processed products (5.4). UTP 
rules can apply in situations of imbalance of bargaining power or they can apply to all operators. 
They can apply to EU operators only or also to operators from third countries (5.5). Enforcement 
can be ensured at the national level following a set of given standards (more or less detailed), or 
it  can  be  centralised  at  the  EU-level  (5.6).  In  the  case  of  enforcement  at  the  national  level, 
national authorities can coordinate or not (5.7). And, finally, different legal instruments can be 
used to put the measures in place, ranging from "soft law" to a EU Directive or Regulation (5.8). 

5.2

  Degree of harmonisation of substantive UTP rules 

5.2.1 Baseline 

Under the baseline option, common measures would not be introduced at the EU level. Member 
States would remain free as regards their choices about the scope of UTP rules. The majority of 
Member  States’  regimes,  albeit  to  varying  degrees,  contain  rules  that  prohibit  unfair  trading 
practices. Member States would continue to operate these regimes. Operators in Member States 
which have no such rules would continue to rely on contract law or, where existing, voluntary 
codes or platforms. 

The  suggestions  made  by  the  European  Commission  in  its  Report  of  January  2016  and  in  its 
Communication  of  July  2014  would  remain  valid.  The  High  Level  Forum  on  the  Better 
Functioning of the Food Supply Chain would continue to provide a forum for stakeholders and 
Member States’ authorities to discuss UTPs in a political framework.  

5.2.2 Options discarded at an early stage: detailed harmonisation of substantive UTP rules 

A complete harmonisation of UTP rules applying in Member States at the EU level would be one 
possible option how to pursue the policy objective of combating UTPs in the food supply chain. 
Member  States  would  no  longer  be  able  to  regulate  UTPs  differently  from  the  common 
approach.  

171 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition 
laid down in Articles 81 and 82 of the Treaty, Article 28. 

37 

 
 
 
                                                 
Detailed harmonisation of UTP rules in the EU food supply chain does, at this stage, not seem 
warranted.  While  it  could  have  the  effect  of  de  facto  -  by  way  of  “occupying  the  legislative 
ground” - constituting a backstop to national UTP measures that would possibly be incompatible 
with the internal market, the degree of convergence of national UTP rules is not such as to invite 
detailed  harmonisation.  There  is  too  little  overall  convergence  of  rules  to  justify  this.  What  is 
more, detailed harmonisation would presuppose that a one-size-fits all logic can be applied but 
this can, at this stage, not be read out of the answers to the different surveys nor would it appear 
from Member States’ regimes. Detailed harmonisation based on a low(est) common denominator 
would  encounter  resistance  from  Member  States  which  have  more  stringent  rules  in  place. 
Conversely,  detailed  harmonisation  mirroring  the  more  stringent  national  regimes  would  elicit 
resistance  from  Member  States  which  have  less  stringent  or  no  rules  in  place.  In  both  cases, 
subsidiarity considerations would militate in favour of a less intrusive  approach. The option of 
introducing detailed harmonisation is therefore discarded. 

5.2.3 Partial harmonisation of substantive UTP rules 

A  partial  harmonisation  approach  concerning  substantive  UTP  rules  could  accommodate 
Member  States’  stricter  UTP  rules  while  at  the  same  time  introducing  a  common  minimum 
standard of protection in the EU. The systems, including the voluntary governance approaches, 
would work in a complementary manner.  

5.3

  Scope of UTP prohibition 

5.3.1 Baseline 

Under the baseline option, no common measures would be introduced at the EU level. Member 
States would remain free as regards their choices about the scope. The SCI would continue as a 
forum for early and non-litigious dispute resolution. 

5.3.2 UTPs subject to generally formulated prohibition (based on fairness) 

UTP  rules  could  operate  via  a  generally  formulated  prohibition  of  unfair  conduct  in  B2B 
relations  in  the  food  supply  chain.  Such  a  general  prohibition  could  be  paired  with  indicative 
examples  of  UTPs  which  illustrate  practices  that  typically  fall  under  its  remit.  A  majority  of 
Member  States  uses  such  a  general  prohibition  in  their  national  context,  often  paired  with 
examples  of  prohibited  practices.172  The  SCI’s  voluntary  Principles  of  Good  Practice  also 
contain  a  general  principle  of  “fair  dealing”  that  is  further  specified  in  specific  principles  and 
examples of unfair practices. 

A  prohibition  of  UTPs  defined  by  a  general  reference  to  fairness  would  provide  a  common 
standard  of  protection  against  UTPs  in  Member  States,  including  in  those  who  have  no  such 
protection as of today. Subject to its application on the ground, the approach would outlaw and 
deter  UTPs  and  thus  contribute  to  reducing  the  occurrence  of  UTPs.  A  common  definition  of 
UTPs,  filled  with  life  through  application  in  Member  States,  could  contribute  significantly  to 
levelling  the  playing  field  between  operators  in  the  different  Member  States.  The  harmonising 
effect of such a general prohibition could be strong thanks to a common definition at EU level 
that would cover UTPs in general and not only those specifically enumerated in a list.  

172 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p. 15.  

38 

 
 
                                                 
By  addressing  the  issue  of  UTPs  at  the  EU  level,  the  option  would  be  expected  to  raise 
awareness and promote fair trading practices in the food supply chain in all Member States.  

5.3.3 Prohibiting specific UTPs 

Under this option, EU rules would prohibit specific, relatively concretely formulated and well-
defined practices as unfair. A short list of such practices would constitute a mandatory minimum 
protection  standard  against  UTPs  in  the  EU,  prohibiting  and  deterring  these  practices  and  thus 
contributing  to  reducing  their  occurrence  (and  linking  them  to  a  common  framework  for 
redress).173  A  minimum  standard  would  contribute  to  levelling  the  playing  field  between 
operators in different Member States.  

This  approach  would  not  have  the  vocation  of  capturing  all  possible  UTPs;  it  would  rather 
address a limited set of manifestly unfair ones without – pursuant to a minimum harmonisation 
approach - preventing Member States to go further, for instance in their application of generally 
formulated national prohibitions. The rules would, due to their specificity, aim to be predictable 
for operators and workable for authorities entrusted with their enforcement.174 

Certain  prohibitions  could  override  parties’  possible  (contractual)  agreement  covering  a  given 
practice.175 This would be the case for unfair practices which are unlikely to be redeemed by, for 
example,  circumstances  that  would  suggest  that  the  parties’  foreseeing  the  practice  is  fair  or 
creates  efficiencies.176  Also  in  business-to-consumers  area  certain  commercial  practices  or 
clauses are regarded as unfair whatever the circumstances and cannot be set aside by contractual 
agreement.177 Such an approach would aim to prevent the de facto imposition of unfair contract 
terms by a party  exercising significant bargaining power.178 The UK Competition Commission 
concluded in a comprehensive study of 2008 that there were circumstances where in spite of the 

173 See Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 1: “In such situations, a well-targeted regulation of 
certain trading practices aiming at ensuring fairness between actors in the food supply chain could help to resolve 
specific issues.” 
174 Renda - Cafaggi, Study on the legal framework covering business-to-business unfair trading practices in the 
retail supply chain, final report, 26 February 2014, p. 31: “This is a very important conclusion, since – as will be 
shown in full detail in section 2 of this report – currently many Member States have in place a system that relies on 
general principles, often included in contract law, without providing legal certainty as regards the types of UTPs 
addressed. The use of black and grey lists, in this respect, reduces uncertainty for both parties to a commercial 
relationship, provided the list follows efficiency and fairness criteria without becoming a straightjacket for the 
parties.” 
175 See discussion in Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices 
in Member State in the Business-to-Business Retail Supply Chain, January 2018, pp. 18-19 and 50. 
176 See Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 2. 
177 See Article 5(5) and Annex I of Directive 2005/29/EC concerning unfair business-to-consumer commercial 
practices in the internal market. Denmark, Finland and Sweden have extended, at least in part, legislation 
implementing Directive 2005/29/EC to business-to-business relations. In Sweden, such extension has explicitly 
included Annex I of the Directive, listing the per se prohibited practices.  
178 See European Commission, Communication on a better functioning food supply chain, 28 October 2009, p. 29. 
Commission report on the implementation of Directive 2011/7/EU on combating late payment in commercial 
transactions, 26 August 2016, p. 4. See also UK Competition Commission 2008, The supply of groceries in the UK 
market investigation, final report, paragraph 37, pointing out that an agreed up-front allocation of risk may be 
excessive. See also FoodDrinkEurope, 13 November 2017, p. 2 in relation to buying alliances of retailers. See 
OECD, 15 May 2014, Competition issues in the food chain industry, p. 25. 

39 

 
 
                                                 
allocation  of  risk  being  agreed  up-front  the  extent  of  risk  transferred  to  the  supplier  was 
excessive.179  

Alternatively, certain practices can be justified (i) if included upfront (ex ante) in an agreement 
between  parties  and  (ii)  if  they  create  efficiencies  by  increasing  the  total  gains  from  the 
transaction to be shared by the parties.180 Such practices would not constitute UTPs and should 
not  be  prohibited  as  they  create  win-win  situations  for  the  parties.181  If  the  same  practices 
occurred  retrospectively  and  without  upfront  agreement  they  would,  however,  lack  in 
predictability and therefore be, in general, unjustified and inefficient.182 Moreover, commercial 
agreements leaving key elements of a transaction to one party’s later unilateral decision would 
not  necessarily  justify  otherwise  unfair  practices,  especially  when  it  is  possible  to  define  such 
key elements or the triggering factors for their activation in the agreement. In fact, the party with 
significant bargaining power could impose and take advantage of this vagueness by unilaterally 
determining these elements after the transaction has started. In such a case, the stronger party is 
indeed  likely  to  create  inefficiencies  by,  e.g.  capturing  the  gains  of  the  transaction  that  were 
originally  allocated  to  the  other  partner  or  by  transferring  losses.183  Last  but  not  least,  certain 
contractual  provisions  or  trading  conditions  agreed  ex  ante  can  still  be  unfair  where  it  is 
generally accepted that they do not lead to efficiencies for both parties in the transaction.184 

In some Member States, a mere provision in the contract as to the possibility of the practice is 
sufficient to shield it from considerations concerning unfairness.185 In other Member States, such 
practices are prohibited and are not subject to parties’ contractual freedom. In yet other Member 
States, the exclusion from UTP rules depends on a sufficient specification of the practice in the 
contract, so that it is predictable for parties, referring to procedural elements of reasonableness 
and transparency in relation to the expected sharing in the total gains.186 For example, reasonable 
notice  must  be  given  in  case  of  unilateral  short  term  changes  foreseen  in  a  contract187  or  cost 
estimates are to be made available if contributions are asked which are not further specified in 
the initial agreement.188 

The voluntary Supply Chain Initiative’s consensus on fair unfair practices (“Principles of Good 

179 See also UK Competition Commission 2008, The supply of groceries in the UK market investigation, final 
report, paragraph 37 of summary. 
180 See Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 2. 
181 Idem, p. 4. 
182 See also UK Competition Commission 2008, The supply of groceries in the UK market investigation, final 
report, and its Appendix 9.8. 
183 See Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018. 
184 Idem, pp. 5 and 7. 
185 See Art. 19.1 of the Bulgarian Foodstuff Act “The contract for purchase of food for resale cannot: (…) 4. be 
amended unilaterally, unless this is explicitly provided for in the contract”. Similar provisions exist in the Latvian 
and Lithuanian legislation. 
186 See UK Competition Commission 2008, The supply of groceries in the UK market investigation, final report, 
paragraph 9.47 and its Appendix 9.8, Annex 1, paragraph 15. 
187 See Irish Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016 (S.I. No. 35 of 2016), 
regulation 5. 
188 Idem, regulation 12. 

40 

 
 
                                                 
Practice”)  can  serve  as  a  useful  point  of  reference  for  a  short  list  of  specific  UTPs.189  The 
respective examples referred to therein give an idea of what operators in the chain agree to be 
types  of  (fair  and)  manifestly  unfair  behaviour.190  It  is  underpinned  by  the  rationale  of  a  fair 
allocation of risk, “agreed by the parties to obtain a win-win situation”. The SCI’s code states 
that all contracting parties in the supply chain should bear their own appropriate entrepreneurial 
risks.191  Unilateral changes  to  contract  terms  shall  not  take  place  unless  this  possibility  and  its 
circumstances and conditions have been agreed in advance.192  

Practices listed in the SCI code are matched by the results of the open public consultation. Of the 
top eight practices identified as UTPs, the majority are also listed in the SCI code of conduct193 
(and can also be subsumed under the more general concepts of the list in the Commission 2016 
report194):  

a.  Unilateral changes of contracts 

b.  Last minute order cancellations 

c.  Claims for wasted or unsold products 
d.  Payments for perishable products later than 30 days (not in SCI195) 

e.  Claims for contribution to marketing campaigns (of retailers) 

f.  Upfront payments to secure contracts 

As  already  indicated  above,  the  legal  landscape  is  diverse  across  Member  States  concerning 
content  and  scope  of  UTP  rules.  A  2018  study  shows,  however,  that  a  significant  number  of 
Member States covers the practices identified above.196   

5.3.3.1

  Unilateral and retroactive changes to contracts 

A  sales  contract  is  a  synallagmatic  arrangement  which  by  definition  can  only  be  changed  by 
mutual agreement. In that sense, unilateral changes are breaches of contract and actionable under 
contract law. 

However,  redress  for  small  parties  in  the  food  supply  chain  may  in  practice  be  ineffective. 
Moreover,  operators  with  significant  bargaining  power  may  be  able  to  effectively  coerce 
suppliers  into  signing  contracts  containing  terms  that  allow  for  unilateral  retroactive  changes 

189 See AIM (European Brands Association), 21 August 2017, p. 2. AIM is a member of the Supply Chain Initiative. 
190 See also the UK situation where legislation rendered a code of conduct mandatory and enforceable through 
public authority involvement (an adjudicator with sanctioning powers was created). 
191 Idem, Specific Principle 6. 
192 Supply Chain Initiative, Principles of Good Practice, 29 November 2011, Specific Principle 2. 
193 See Annex 2 for more details. 
194 See section 2.2. 
195 The Supply Chain Initiative does not include late payments while the Agricultural Markets Task Force report 
and the open public consultation questions do. 
196 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p. 17 and Annex G. Table 2.3. 

41 

 
 
                                                 
without further specification.197 Unreasonably short notice periods and the absence of objectively 
justified  reason  for  such  changes  would  be  parameters  to  take  into  account  (see  SCI  on 
‘Termination’).  For  example,  the  UK  Groceries  Supply  Code  of  Practice  focuses  on  the 
transparency of the contract terms that allow such changes.198 

The SCI  considers retroactive unilateral changes in  the cost or  price  of products  or services to 
constitute  unfair  business  conduct  but  specifies  that  a  contract  may  contain  legitimate 
circumstances and conditions under which subsequent unilateral action may be permitted.  

5.3.3.2

  Last-minute order cancellations  concerning perishable products 

Last-minute order cancellations  of perishable products are a variant of the practice that consists 
in  unilateral  and  retroactive  changes  to  contracts.  Such  changes  tend  to  leave  suppliers  of 
perishable  products  without  alternative  marketing  opportunities  and  are  incompatible  with  the 
principle that there should not be an excessive transfer of one’s own entrepreneurial risk to one’s 
(weaker) business partner. Last-minute order cancellations should not become a possibility due 
to contractual arrangements.  

5.3.3.3

  Claims for wasted or unsold products 

Claims for wasted or unsold products from suppliers can constitute an (often retroactive) practice 
which  stands  ill  against  the  specific  principle  of  the  SCI  that  “all  contracting  parties  in  the 
supply chain should bear their own appropriate entrepreneurial risks”. Once purchased, the risk 
of not selling the product or an impairment that renders it unmarketable (and wasted) could be 
expected  to  lie  with  the  buyer,  maintaining  therefore  his  incentives  to  efficiently  plan  and 
manage his business. Such claims would be unfair.  

This  would  be  different  if  the  wastage  is  caused  by  the  negligence  or  default  of  the  supplier. 
Moreover, there can be cases where the conditions for a return of unsold products are predictably 
laid down in the agreement and in line with a fair mutual allocation of the financial risk. Claims 
on such a basis would not constitute unfair conduct.    

5.3.3.4

  Payments for perishable products later than 30 days 

Payments delays are subject to a horizontal Directive (Late Payment Directive).199 The Directive 
stipulates inter alia that businesses have to pay their invoices within 60 days, but can choose a 
longer payment term as long as it is expressly agreed in the contract and provided that it is not 
grossly  unfair  to  the  creditor.  In  the  directive  the  concept  of  "grossly  unfair"  is  applied  to 
contractual  terms  and  practices  and  is  further  specified  to  relate  to  any  "gross  deviation  from 
good commercial practice, contrary to good faith and fair dealing" (Article 7).  

197 European Commission, Competition in the food supply chain, Staff Working Document, 28 October 2009, p. 28. 
See also British Institute of International and Comparative Law, Fair Relations in the Food Supply Chain - 
Establishing Effective European Enforcement Structures, paper of 2014, p. 12. 
198 See the Groceries Supply Code of Practice as Schedule 1 of the Groceries (supply chain practices) market 
investigation order 2009, Article 3 – “Variation of Supply Agreements and terms of supply”: “[the agreement] sets 
out clearly and unambiguously any specific change of circumstances [...] that will allow for such adjustments to be 
made”. See also Irish Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016 (S.I. No. 35 
of 2016), Regulation 5. 
199 Directive 2011/7/EU on combating late payment in commercial transactions. 

42 

 
 
                                                 
The  Directive  has  been  transposed  in  Member  States.  When  implementing  the  directive,  a 
number  of  Member  States  have  introduced  provisions  limiting  payment  terms  for  perishable 
foods,  in  certain  cases,  to  less  than  60  days  (see  Annex  D).  Currently,  24  Member  States200 
stipulate shorter payments periods (than 60 days) for all sectors of the economy or, alternatively, 
for  food  products.201  While  11  of  these  Member  States  provide  for  a  30  days202  without 
derogation possibility, 13 Member States provide for 30 days, but allow parties to extend the 30 
days by way of agreement.203 

Fresh  agricultural  products  (fruits  and  vegetables,  meat,  dairy  products)  are  sold  relatively 
quickly  in  grocery  stores  to  consumers  lest  their  perishability  makes  them  unmarketable. 
Literature unanimously point to the fact that delayed payments from farmers’ contractors have a 
negative  impact  on  investments  undertaken  at  the  farm  and  farm  output.204  In  light  of  this, 
payment delays for perishable products of longer than 30 days would not seem justified. In the 
interest  of  fairness  and  so  as  to  create  a  level  playing  field  at  EU  level  concerning  fresh 
agricultural  products  a  maximum  payment  delay  of  30  days  could  be  rendered  mandatory.205 
Allowance could be made for specific cases such as value-sharing contracts for which the value 
to be split between trading parties is realised only at a later stage.206 

5.3.3.5

  Claims for contributions to promotional or marketing costs of buyer 

Under  the  heading  of  “entrepreneurial  risk  allocation”  the  SCI  gives  examples  of  transfers  of 
unjustified  or  disproportionate  risk  to  a  contracting  party.  Imposing  a  requirement  to  fund  a 
contracting party’s proprietary business activities or to fund the cost of a promotion are listed as 
specific examples. It is explained that different operators face specific risks at each stage of the 
supply chain linked to the potential rewards for conducting business in that field. 

Having  said  this,  parties’  ex  ante  agreements  about  the  possibility  of  such  contributions  can 
suggest mutual efficiencies (win-win situations) and would not imply an unfair practice.207 Such 
contributions  would  therefore  be  deemed  lawful  if  exercised  in  accordance  with  the  defined 
terms of the up-front agreement, even if they are implemented after the transaction has started. A 
case  in  point  would  for  instance  be  the  participation  by  suppliers  in  retail  promotion  covering 
their branded products  in accordance with  the expected allocation  of risks and rewards.208 The 
same  rationale  would  not  apply  to  commercial  arrangements  which  include  vague  and 
unpredictable  provisions  concerning  contributions  and  leave  these  provisions  to  be  unilaterally 

200 Only Belgium, Greece, Croatia and Luxemburg provide a payment delay of 60 days or longer, if parties agree so.  
201 12 Member States have adopted special provisions for either agricultural or food products, some focus on 
perishable/fresh products: Bulgaria, Czech Republic, Spain, France, Italy, Latvia, Lithuania, Hungary, Portugal, 
Romania, Slovenia and Slovakia. 
202 Bulgaria, Czech Republic, Germany, Spain, France, Italy, Latvia, Lithuania, Hungary, Portugal and Romania. 
203 Denmark, Estonia, Ireland, Cyprus, Malta, Netherlands, Austria, Portugal, Slovenia, Slovakia, Finland, Sweden 
and the UK. 
204 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Falkowski, p. 25. 
205 See Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 5. 
206 Idem, p. 6. Similarly, certain payment instalments may occur at year’s end under statutory rules of cooperatives. 
207 Idem. 
208 Swedish food retailers, 17 November 2017, reply to open public consultation, p. 2: “If there would be no cost for 
suppliers, the effect on the market would be less marketing of branded products and more marketing of private label 
products.” 

43 

 
 
                                                 
and ex post determined by one party.209  

5.3.3.6

  Requests for upfront payments to secure or retain contracts without consideration 

Where  parties’  agreement  about  upfront  payments  implies  mutual  efficiencies  (win-win)  they 
would suggest the lawfulness of such contributions. Moreover, parties should have the ability to 
enter into business relationships and leave them as they see fit, account being taken of reasonable 
termination  modalities.  Indications  in  a  commercial  agreement  to  the  effect  that,  for  instance, 
marketable  business  resources  are  being  made  available  or  that  risks  for  referencing  new 
products are allocated should be taken into account.210  

However,  certain  requests  for  payments  without  any  consideration  (sometimes  referred  to  as 
“hello money”) would not appear to be in line with fair cost and risk allocation as for instance 
referred to in the SCI code of good practices.211  

5.3.3.7

  Criteria concerning the assessment of unfairness of the practices  

A  categorisation  of  the  above  practices  as  unfair  depends  on  the  circumstances  in  which  they 
occur  (see  also  discussion  in  section  6.3.1  on  the  impact  of  the  options).    Unilateral  and 
retroactive  changes  of  contracts,  last  minute  order  cancellations  of  perishable  products,  claims 
for wasted products and payments for perishable products later than 30 days would typically be 
unfair whatever the circumstances. For example, even if a contractual clause specifically enabled 
such practices this would not redeem them. Certain conditions may however apply, for example 
in  the  case  of  claims  for  wasted  products,  the  condition  that  such  waste  should  not  be  the 
consequence of negligence attributable to the supplier. 

As regards other practices such as claims for contribution to marketing campaigns or promotions 
and  upfront  payments  to  secure  contracts,  their  inclusion  in  clear  terms  in  a  supply  agreement 
between  parties  can  suggest  efficiencies  and  mutual  benefits  for  the  parties  and  corresponding 
practices and arrangements would, therefore, not be deemed unfair.  

5.4

  Operationally,  an  EU  approach  based  on  the  options  set  out  in  section  5  should 
incorporate  the  said  considerations  and  be  shaped  accordingly.  Coverage  of 
products 

5.4.1 Baseline 

The  baseline  scenario  implies  that  there  are  no  EU  rules  addressing  UTPs.  The  question 
concerning coverage in terms of products does not arise.  

209 Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 7. 
210 See for instance Groceries Supply Code of Practice as Schedule 1 of the Groceries (supply chain practices) 
market investigation order 2009, point 9, “Limited circumstances for Payments as a condition of being a 
Supplier”. 
211 The SCI code describes demanding payments for services not rendered or goods not delivered as unfair conduct. 
See also Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on 
competition laid down in Articles 81 and 82 of the Treaty, recital 9: “This is particularly the case of legislation 
which prohibits undertakings from imposing on their trading partners, obtaining or attempting to obtain from them 
terms and conditions that are unjustified, disproportionate or without consideration.” (emphasis added) 

44 

 
 
                                                 
5.4.2 Agricultural and processed agricultural products covered 

UTP rules would focus on agricultural products and processed agricultural products traded along 
the food supply chain, thus covering all food products traded in the food supply chain.212 Sales of 
such  products  in  the  chain  would  be  subject  to  respect  of  the  EU’s  UTP  rules.  This 
comprehensive  scope  would  be  consistent  with  the  SCI’s  approach  and  UTP  measures  in 
Member States.213 

5.4.3 Agricultural products covered 

Alternatively, UTP  rules  could target agricultural products (Annex I  TFEU) traded  in  the  food 
supply  chain.  In  retailers’  shelves  they  account  for  about  60%  of  food  products  sold  to 
consumers, a sizeable share.214 UTP rules applying to agricultural products may in practice have 
positive  spill-over  effects  where  buyers  source  both  agricultural  and  processed  agricultural 
products from the same supplier.215 

5.5

  Operators covered by UTP rules 

5.5.1 Baseline 

Under  the  baseline  option,  no  common  measures  would  be  introduced  at  the  EU  level.  The 
question concerning the scope of UTPs rules would not arise. Member States would remain free 
as regards their choices about the scope of UTP rules.  

5.5.2 UTP rules apply in situations characterised by weak bargaining power 

UTP rules could target situations which are characterised by an imbalance of bargaining power 
or  a  relationship  of  economic  dependency,  these  being  generally  drivers  of  UTPs.216 
Accordingly,  UTP  rules  would  protect  operators  finding  themselves  in  such  a  weak  position. 
Certain national UTP rules apply in situation of dependence of an operator on the counter-party 
to  the  transaction  or  in  situations  where  an  operator  has  market  power/superior  bargaining 
power.217  Small  agricultural  producers  including  their  associations  would  be  covered  by  the 
protection. Due to the backward cascading effects UTPs have in the chain (see section 2.5.1.1), 
the protection could be extended to protect also other such operators in the chain. This would in 
addition prevent unintended effects such as trade diversion away from farmers due to a buyer’s 
possible incentive to rather deal with an independent processor than a, say, farmers’ processing 
cooperative which is protected by UTP rules. 

Verification  of  the  existence  of  the  existence  of  weak  bargaining  power  or  an  imbalance  of 
bargaining  power  could  be  left  to  the  case-by-case  assessment  of  a  competent  authority. 

212 See footnote 142. 
213 Also in this direction, for example, COOP de France, reply to open public consultation, 22 August 2017, p. 1. 
214 See Annex B. 
215 Such a buyer may not differentiate his business behaviour in accordance with the characterisation of some of the 
products he purchases as processed agricultural products. However, in cases where the supply relationship 
concerned only processed agricultural products, the UTP rules would not apply and any possible spill-over effect 
would therefore be unlikely. 
216 See OECD, 15 May 2014, Competition issues in the food chain industry, p. 23-24. See for instance Spain: 
economic dependence exists when the supplier sells at least 30% of the overall production to a single buyer. 
217 For instance in Germany, Cyprus, Latvia and Poland. 

45 

 
 
                                                 
Alternatively,  a  proxy  for  such  an  imbalance  could  for  example  be  found  in  the  size  of  the 
undertakings  thereby  increasing  predictability.  The  status  as  an  SME  including  a  micro-
enterprise in the food supply chain could trigger the protection of the UTP rules and thus defines 
their scope of application.218 In some Member States the size of potential operators is considered 
a  proxy  of  bargaining  power.  Some  Member  States  have  limited  the  scope  of  legislation  to 
businesses  exceeding  a  certain  size219  or  to  relations  in  which  one  of  the  parties  is  a  small  or 
micro-enterprise220. UTP rules could for instance be formulated in such a way as to prohibit the 
use of the UTPs concerned for all operators in the food supply chain which trade food products 
with SME operators. In other words, under this option only SME operators, i.e. micro, small and 
medium-sized enterprises with less than 250 staff headcounts and either a turnover below EUR 
50 million or a balance sheet total below EUR 43 million, would enjoy protection. Commercial 
relationships between large operators would not be governed by such an approach. Sales of food 
products by a SME supplier to a non-SME buyer would be covered.  

5.5.3 UTP rules apply to all operators 

Under this option, UTP rules would protect all operators in the food supply chain regardless of 
their size. This approach is adopted by the voluntary code agreed by the SCI. UTP rules applying 
to all operators also reflect the approaches certain Member States follow.221  

5.5.4 UTP rules ‘benefit’ 3rd country suppliers 

UTP  rules  can  enable  3rd  country  suppliers  to  rely  on  them  when  confronted  with  UTPs  by 
operators situated in the European Union.222 

5.5.5 UTP rules ‘benefit’ suppliers situated in the EU 

Alternatively,  UTP  rules  would  only  apply  insofar  as  commercial  supply  relationships  are 
concerned which cover sellers and buyers which are situated in the EU. 

218 See Definition of SMEs are set out in Commission Recommendation 2003/361/EC of 6 May 2003 concerning 
the definition of micro, small and medium- sized enterprises (OJ L 124, 20.5.2003, p. 36). 
219 See Croatia: rules apply to resellers whose turnover in Croatia exceeds approx. EUR 132,500, and to processors 
whose turnover in Croatia exceeds approximately EUR 66,250. Polish legislation applies when the business’s trade 
value in the past two years exceeds approximately EUR 11,900 and when the infringer’s (group’s) turnover exceeds 
approx. EUR 23,867,100. The UK Groceries (Supply Chain Practices) Market Investigation Order 2009 applies to 
any  retailer  with  a  turnover  exceeding  GBP  1  billion  with  respect  to  the  retail  supply  of  groceries  in  the  United 
Kingdom, and which is designated as a Designated Retailer. 
220 This approach is partially taken by Spanish legislation when regulating formal and content requirements of 
supply contracts: these apply only to transactions exceeding EUR 2,500 in value and one of the proxies for 
unbalanced relations applies; among these proxies the size of the harmed business as an SME is also considered; 
similarly, Article 20 of the German Act against Restraints of Competition, abuse of relative market power is 
prohibited when it involves SMEs as “dependant” enterprises. Under Portuguese law (DL no. 166/2013, of 
horizontal application) specific provisions have been provided for the protection of small and microenterprises, and 
fines are foreseen in accordance with the infringing party’s size. 
221 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, summary tables 1 and 2.3.  
222 See British Institute of International and Comparative Law, Fair Relations in the Food Supply Chain - 
Establishing Effective European Enforcement Structures, paper of 2014, p. 11. 

46 

 
 
                                                 
5.6

  Enforcement 

5.6.1 Baseline 

Under  the  baseline  option,  no  governance  measures  would  be  introduced  at  the  EU  level. 
Member States would remain free concerning the enforcement of UTP rules, if any. The redress 
options  for  victims  of  UTPs  would  depend  on  the  regimes  applicable  in  Member  States.  The 
suggestions made by the European Commission in its Communications in July 2014 and January 
2016 would remain valid.  

The Supply Chain Initiative has promoted cultural change concerning UTPs in the food supply 
chain.  It  can  be  expected  to  explore  its  potential  to  further  adjust  in  accordance  with  concerns 
raised  concerning  its  effectiveness.  It  is  unlikely,  however,  that  it  will  integrate  enforcement 
modalities normally associated with public enforcement (e.g. own initiative investigations, fines, 
publication  of  results).  It  can,  therefore,  not  be  excluded  that  EU  farmers’  organisations  will 
continue  to  abstain  from  participating  in  the  Supply  Chain  Initiative.  In  any  case,  the  Supply 
Chain Initiative does not constitute a suitable tool achieving a (partial) harmonisation of Member 
States’ UTP rules concerning enforcement. 

As has been shown, the fragmentation of legal rules implies certain shortcomings concerning the 
effectiveness of enforcement regimes in addressing the fear factor. The baseline approach would 
not aim to address this lack of effective redress, nor would a technical coordination mechanism 
(network) of enforcement authorities be appropriate in the absence of a common framework. 

5.6.2 Options discarded at an early stage 

Centralised  enforcement  would  operate  via  an  enforcement  body  at  EU  level,  for  instance  the 
European  Commission.  A  variation  of  this  would  be  to  foresee  the  parallel  application  by 
competent  Member  States  authorities  and  the  European  Commission  as  is  the  case  for  EU 
competition law.  

Centralised enforcement could make sense if there was one set of UTP rules applying throughout 
the EU. To the extent that differences of substantive rules in Member States remain, centralised 
enforcement  would  not  seem  an  appropriate  course  of  action.  It  is  difficult  to  see  how  an  EU 
body would enforce diverging national rules or, for that matter, assume an (EU) legal mandate to 
do so. The option of introducing centralised enforcement is therefore discarded. 

5.6.3 Minimum enforcement requirements “plus” 

Under this option, the following enforcement requirements would apply: 

  Designation of a competent authority; 

  Ability to carry out own initiative investigations; 

  Ability to receive and treat complaints confidentially; 

  Ability to receive complaints by associations of operators; 

  Ability to impose fines; 

  Ability to publish results of an investigation; 

  Mutual assistance in transnational cases. 

Certain procedural powers for authorities competent to monitor UTP rules, such as investigative 

47 

 
 
powers  in  relation  to  undertakings  (information  requests)223,  the  ability  to  receive  and  treat 
complaints  confidentially224,  to  carry  out  own-initiative  investigations225  and  to  accept 
complaints by associations of operators226 have, in several EU Member States, proven important 
for the perception of operators that effective enforcement exists and is apt at addressing the root 
causes that can lead victims of UTPs to not seek redress. The existence of a deterrent, such as the 
power to impose fines227 or the publication of investigation results, may encourage behavioural 
change and pre-litigation solutions between the parties.228 The ability to share information with 
other Member States’  authorities concerning transnational cases (mutual  assistance) could be a 
further appropriate element of effective enforcement.229  

A recent study shows that in as many as 19 Member States administrative authorities other than 
ordinary courts have powers to enforce rules addressing selected UTPs.230 In 17 Member States 
administrative  authorities  can  conduct  own  initiative  investigations  concerning  UTPs.  In  14 
Member  States  administrative  authorities  can  receive  confidential  complaints.  But  in  less  than 
half of EU Member States (13)  has an administrative authority the power to receive to receive 
confidential complaints and conduct own initiative investigations.231  

Member States could be required to designate a competent authority for UTP enforcement which 
is  given  certain  minimum  enforcement  powers  inspired  by  best  practices  in  Member  States’ 
existing regimes.232 While courts may act upon UTP violations, their institutional lack of ability 

223 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, p. 101. See also British Institute of International and 
Comparative Law, Fair Relations in the Food Supply Chain - Establishing Effective European Enforcement 
Structures, paper of 2014, p. 13. 
224 See European Commission Communication, Tackling unfair trading practises in the business-to-business food 
supply chain, 15 July 2014, suggestion 9 and Report from the European Commission to the European Parliament 
and the Council on unfair business-to-business trading practices in the food supply chain, 29 January 2016, p. 6. See 
also British Institute of International and Comparative Law, Fair Relations in the Food Supply Chain - Establishing 
Effective European Enforcement Structures, paper of 2014, p. 12. 
225 See e.g. European Commission Communication, Tackling unfair trading practises in the business-to-business 
food supply chain, 15 July 2014, p. 12, suggestions 9 and 10. 
226 See for instance Max Planck Institute for Intellectual Property and Competition Law, IIC (2013) 44:701–709, 23 
August 2013, p. 708. See also British Institute of International and Comparative Law, Fair Relations in the Food 
Supply Chain - Establishing Effective European Enforcement Structures, paper of 2014, p. 12. Such possibilities 
may already exist in judicial proceedings albeit without the ability to be awarded damages, see for example the 
Dutch situation discussed in SEO economisch onderzoek, Oneerlijke handelspraktijken, report for the Dutch 
ministry of economy, 2013, pp. 8, 14 and 22. Collective action against recurring unfair contact, for instance in the 
form of unfair contract clauses, can serve to protect the identity of a particular complainant.  
227 SEO economisch onderzoek, Oneerlijke handelspraktijken, report for the Dutch ministry of economy, 2013, p. 
36. 
228 Accordingly, the UK’s Groceries Code Adjudicator has resulted in significant reductions in breaches of the 
Groceries Code over four years, according to yearly survey data reported in 2017, even while the number of cases 
acted upon was low.  
229 See European Parliament resolution on unfair trading practices in the food supply chain, 7 June 2016, paragraph 
34. See also European Commission Communication, Tackling unfair trading practises in the business-to-business 
food supply chain, 15 July 2014, p. 12, suggestion 10.  
230 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, pp. 20-21.  
231 Idem, p. 24. 
232 See the suggestion in European Commission Communication, Tackling unfair trading practises in the business-
to-business food supply chain, 15 July 2014, p. 11. 

48 

 
 
                                                 
to  take the fear factor into  due account  would not  make  them competent  authorities within the 
said meaning.233 Minimum requirements for effective enforcement of EU rules in Member States 
–  apt  to  address  the  fear  factor  -  could  be  laid down  drawing  on  the  above  list  while  stopping 
short of a detailed harmonisation of enforcement modalities.234  

In  the  open  public  consultation,  92%  of  the  respondents  agreed  or  partially  agreed  that  there 
should  be  minimum  standards  applying  to  the  enforcement  of  UTP  rules  in  the  EU.235 
Respondents were asked which elements they considered being an important part of an effective 
public  enforcement  of  UTP  rules:  94%  referred  to  transparency  of  investigations  and  results; 
93% to the possibility of imposing fines in the case of violations of the rules; 92% the possibility 
to file collective complaints; 89% the ability to receive and to treat confidential complaints; 89% 
the  designation  of  a  competent  authority;  73%  the  ability  to  conduct  own-initiative 
investigations.236 

Confidentiality of complaints in later stages of proceedings is considered with caution though in 
certain Member States, due to the effect on due process and practical difficulties. Confidentiality 
may be difficult to ensure in all those cases in which practices are imposed on a single counter-
party  or  a  limited  number  thereof.  Indeed,  some  national  experts  reported  that  in  fact 
confidentiality might be hindered by the need to provide detailed information, whose origin may 
be traced back to the victim. Own-initiative investigations and the ability to instruct complaints 
by associative bodies collectively acting in the interest of members who became victims of UTPs 
can provide conduits that can ensure protecting the anonymity of an individual UTP victim.  

5.6.4 Minimum enforcement requirements 

Under this restricted option, the following enforcement requirements would apply: 

  Designation of a competent authority; 

  Ability to carry out own initiative investigations; 

  Ability to receive and treat complaints confidentially. 

This  would  be  in  line  with  the  suggestions  that  have  been  made  by  the  Commission  in  its 
communication of 2014237 and in its report of 2016238. 

5.7

  Coordination of enforcement authorities 

5.7.1 Baseline 

Under  the  baseline  option,  no  governance  measures  would  be  introduced  at  the  EU  level. 

233 Ibidem and Annex B, section 2. 
234 See recommendations in Report from the European Commission to the European Parliament and the Council on 
unfair business-to-business trading practices in the food supply chain, 29 January 2016, sections 4 and 5. 
235 See Annex 2. 
236 Ibidem. 
237 European Commission Communication, Tackling unfair trading practises in the business-to-business food supply 
chain, 15 July 2014, p. 12. 
238 Report from the European Commission to the European Parliament and the Council on unfair business-to-
business trading practices in the food supply chain, 29 January 2016, p. 6. 

49 

 
 
                                                 
Member States would remain free as regards measures addressing UTPs. The suggestions made 
by  the  European  Commission  in  its  Communications  in  July  2014  and  January  2016  would 
remain valid.  

The High Level Forum on the Better Functioning of the Food Supply Chain would continue to 
provide a platform for discussing UTP (governance) developments including the Supply Chain 
Initiative  (its  mandate  extends  through  to  2019).  This  may  lead  to  lessons  and  best  practices 
being  shared.  The  forum’s  platform  does,  however,  not  amount  to  a  network  of  enforcement 
authorities  comparable  in  its  role  and  coordination  function  to,  for  example,  the  European 
Competition Network. 

5.7.2 Coordination 

A  coordination  mechanism  between  competent  authorities239  would  enable  the  creation  of  a 
network of authorities that could usefully accompany the EU rules, their coordinated application 
and facilitate an exchange of best practices as well as, importantly, collect data through Member 
State reporting that would, down the road, inform an evaluation (and possible adjustment) of the 
measures.240  The  European  Commission  would  facilitate  the  network  by  hosting  regular 
meetings based on annual application reports submitted to it by the Member States’ competent 
authorities.  A  similar  mechanism  exists  in  the  area  of  competition  law  (the  European 
Competition  Network)  and  contributes  to  coordination  among  national  competition  authorities 
and evidence- and application-based discussions.241 Such a form of cooperation would be in line 
with the suggestions that have been made by the Commission in its Communication of 2014.242 

5.8

  Legal instrument to be used 

Specific  policies  can  be  implemented  through  a  variety  of  legislative  or  non-legislative 
instruments,  ranging  from  self-regulation  to  recommendations,  or  full  mandatory  binding 
measures. Legislative measures can take the form of regulations or directives.  

5.8.1 Recommendation 

‘Soft-law’ could be used to encourage Member States towards an at least partial harmonisation 
of legal regimes, based on a common proposed understanding of what practices are considered 
unfair and should not be applied.  

If  Member  States  followed  suit  this  would  contribute  to  reducing  UTPs,  establishing  effective 
redress possibilities and levelling the playing field in the EU insofar as UTPs are concerned. A 
recommendation  could  take  the  form  of  comprehensive  guidance  that  would  cover  the  whole 
‘universe’ of UTPs or act as a framework recommendation trying to establish what would be a 
baseline  of  rules.  Such  guidelines  could  also  address  desirable  enforcement  mechanisms  and 
promote exchanges of best practices.  

239 See discussion in Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices 
in Member State in the Business-to-Business Retail Supply Chain, February 2018, p. 50. 
240 AIM (European Brands Association) considers that there is “an urgent need for coordination mechanisms”. 21 
August 2017, p. 2. 
241 See this link. See also the suggestion in Association Française d’Etude de la Concurrence (AFEC), 2013, Green 
Paper reply, p. 27. 
242 European Commission Communication, Tackling unfair trading practises in the business-to-business food supply 
chain, 15 July 2014. 

50 

 
 
                                                 
A  recommendation  would  not  legally  require  Member  States  to  take  action;  its  effect  would 
depend  on  the  degree  to  which  Member  States  decided  to  follow  the  recommendation.  In  the 
open  public  consultation  for  this  initiative  only  4%  of  the  respondents  who  believed  action 
should  be  taken  (which  was  95%  of  total)  preferred  purely  non-legislative  action.243 
Recommendations could also (again) be made in relation to the voluntary Supply Chain Initiative 
as was done in the European Commission’s January 2016 report (see discussion in section 3.3). 

5.8.2 Legally binding instrument 

A regulation would be legally binding and directly applicable in all Member States (Article 288 
TFEU). As such, it can adopt a minimum harmonisation approach while leaving Member States 
room to act beyond the minimum harmonisation it lays down.  

Alternatively,  a  directive,  legally  binding  as  to  the  result  to  be  achieved,  could  be  used  to 
stipulate  UTP  framework  rules.  A  directive  leaves  the  choice  of  form  and  methods  as  regards 
how to achieve the results to the national authorities (Article 288 TFEU). A directive, too, could 
leave leeway for Member States to act beyond the minimum results stipulated in it. 

6  What are the impacts of the policy options? 

6.1

Introduction 

This  section  focuses  on  the  likely  impacts  of  the  possible  policy  options  set  out  in  section  5, 
namely the scope of UTP rules, the enforcement modalities including coordination, the coverage 
of products and the scope in terms of operators covered, and the type of legal instrument to be 
used. Options which have been discarded at an early stage are not further discussed. Most of the 
expected impacts are economic but possible social and environmental impacts are also referred 
to.  

The section starts with a general discussion of the impact (harm, benefits and costs) on economic 
operators,  consumers  including  innovation  and  Member  States.  The  concept  of  UTPs  covers 
many specific practices which have varying characteristics and impacts on economic operators. 
Therefore,  an  assessment  of  the  balance  of  impacts  is  appropriate  for  the  practices  considered 
(section 6.3.1). The impact on Member States’ competent authorities in terms of administrative 
costs  is  less  dependent  on  the  specific  UTPs  covered  by  the  initiative  and  is  considered 
separately. The benefits and costs of EU action are set out against the baseline of the continued 
absence of a minimum standard of protection against UTPs across the common market (both as 
regards substantive UTP rules and effective enforcement possibilities). Plausible option packages 
are identified and described in section 6.4, then compared in section 0 and eventually a preferred 
option – in form of an option package – is presented in section 8. 

243 See Annex 2, section 2.2.b. 

51 

 
 
 
                                                 
6.2

Impact on operators, consumers and Member States 

6.2.1 Impact on economic operators 

6.2.1.1

  Benefits 

A  precise  quantified  estimate  of  the  benefits  that  would  accrue  to  operators  through  EU 
legislation is not feasible (see section 2.5.1.1). For one, an EU framework approach based on a 
short  list  of  prohibited  UTPs  would  not  tackle  the  possible  damage  of  all  the  UTPs  that  are 
referred  to  in  the  numerous  surveys  and  papers  regarding  the  issue.  An  approach  based  on  a 
generally  formulated  prohibition  would  not  allow  a  precise  quantification  of  the  damage 
prevented either, not least due to the uncertainty concerning how it would be applied to specific 
practices. It is equally difficult to quantify the benefits of ensuring more effective enforcement 
through introducing minimum enforcement requirements.  

Having said this, each of the UTPs described in section 5.3.3 is bound to have a negative impact 
on its victims’ bottom line in terms of the transfer of risk and undue generation of uncertainty, in 
other words costs that would in competitive markets not be part of their entrepreneurial agency.   

Respondents in the numerous surveys cited in this impact assessment almost all converge in their 
concern  about  UTPs’  occurrence  and  harm  and  in  their  expectations  of  positive  effects  from 
public  (EU)  UTP  rules  and  their  effective  enforcement.  For  instance,  stakeholders  in  the  food 
supply chain including retailers and processors agreed a code of good practices in 2011 aiming to 
use  private  governance  measures  to  improve  the  governance  of  UTPs  (the  SCI  formed  around 
it).244  Respondents  to  the  surveys  consider  a  mixture  of  voluntary  rules  and  public  rules 
including enforcement the most desirable governance approach to UTPs. The expected benefits 
include  improvements  in  the  allocation  of  risk,  reduced  uncertainty  for  operators  and  better 
revenue that operators can capture in the markets if not subject to UTPs.245  

Survey data on the monetised costs of UTPs (potential benefits of legislation) in the food supply 
chain does exist, typically expressed as a share of turnover. However, these data cannot form a 
proper basis for the estimation of the benefits of the legislation. These data are not drawn from 
representative  surveys  and,  as  such,  are  likely  to  suffer  from  self-selection  bias  and  to  not  be 
reliable to extend to the underlying population (even if the cost survey data may be closer to the 
typical  damage  suffered  by  individual  firms  in  the  specific  part  of  the  population  that  suffers 
harm from UTPs). As such, it is not possible to extrapolate from survey data to the population 
for benefits.246  

244 Supply Chain Initiative, Principles of Good Practice, 29 November 2011. The code demonstrates “(i) a 
recognition that unfair commercial practices may occur throughout the whole food supply chain and (ii) stakeholder 
willingness to address those practices in a consensual and effective way”. 
245 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016. 
246 Although non-representative, the survey evidence on costs is broadly consistent across sources: Dedicated 
Research found reported UTP median costs to suppliers of the retail sector to amount to EUR 2 million and median 
work days lost at 20 working days  per company per year; costs incurred as a percentage of cooperatives’ annual 
turnover were reported to amount to 1.7% (or EUR 6.1 billion, Dedicated Research in 2013); food industry figures 
put the cost incurred as a percentage of their turnover at 3.9% on average (median: 2%), or about EUR 7 million per 
company (2011); an AIM survey puts the costs at 1.25% of annual turnover of food multinationals supplying the 

52 

 
 
 
                                                 
 
While it is not possible to provide a precise estimate of the benefits (avoided UTP costs), it may 
still  be  useful  to  form  a  broad  idea  of  the  possible  magnitude  of  the  costs  of  UTPs.  To  this 
purpose some assumptions can be made about  the damage  and frequency of UTPs. Taking the 
(representative  sample)  survey  results  used  by  the  UK’s  Competition  Commission  for  the  UK 
market  before  effective  enforcement  was  introduced  one  finds  “that  one-third  to  one-half  of 
suppliers  experience  practices  such  as  payment  delays,  excessive  payments  for  customer 
complaints, and retrospective price adjustments”.247 Assuming similar figures across the EU and 
that for those companies that experience such practices related UTPs costs are between 1% and 
2% of turnover, and knowing that agriculture SME turnover in the EU is about EUR 325 billion 
and food industry SME turnover in the EU is about EUR 470 billion a range for the magnitude of 
possible  costs  of  UTPs  occurring  in  the  food  supply  chain  can  be  calculated.  The  approach 
would put these costs at EUR 1 billion to EUR 3.3 billion for agricultural SMEs and EUR 1.5 
billion to EUR 4.7 billion for food SMEs (or EUR 2.5 billion to EUR 8 billion in total for both 
agriculture  and  food  processing  SMEs).  The  damage  imposed  by  the  six  UTPs  identified  as 
occurring most frequently, which broadly align with the SCI principles of good practice, would 
be  a  further  fraction  of  these  figures.  Other  indirect  benefits  in  the  form  of  increased  trust 
between operators could also materialise, which are, in the main, expected to reduce transaction 
costs along the food supply chain. 

In addition, there is evidence of harm from public investigations and court cases, indicating the 
existence  of  significant  damages  in  some  cases  (to  note:  this  data  cannot  be  generalised  to  the 
relevant population). Most of this non-survey evidence comes from Member States where UTP 
rules exist and are effectively enforced. For example, the UK investigations guarantee anonymity 
and access to private commercial documents. This allows investigations into damaging practices 
and  the  frequency  with  which  they  occur  to  be  established.248  In  terms  of  the  magnitude  of 
damages the UK Groceries Code Adjudicator found in the Tesco investigation many examples of 
large amounts owed to  suppliers being paid late. Examples quoted  range in  payment  delays  of 
‘over five months’ to ‘over twelve months’; with the values paid late of ‘over GBP 100,000’ to 
‘nearly GBP 2 million’ per supplier. Other retailers were also found to have engaged in UTPs (ex 
post): information received by the UK GCA indicated suppliers “were being asked for significant 
financial contributions to keep their business with [...]. In some cases, this was as much as 25% 
of the annual turnover of the stock.” 

In France a leading supermarket chain has twice been found to be practicing banned UTPs. In the 
first  case  retroactive  demands  for  payments  resulted  in  the  courts  establishing  that  EUR  23.3 
million  had  to  be  repaid  to  28  suppliers  (plus  a  EUR  2  million  in  fine).  In  another  case,  EUR 
61.3  million  had  to  be  repaid  to  46  suppliers  (plus  a  EUR  2  million  fine),  for  requests  for 
payments without receiving a service in return from suppliers. However it is rare that such cases 
come before courts due to the "fear factor". 

As part of the consultation, Member States were asked as to the existence of analysis related to 

retail chain (2017). The targeted consultation of undertakings for this impact assessment received 104 answers, 94 of 
which replied to the cost question, and reported damages of, on average, 1.8% of turnover (2017). 
247 UK Competition Commission, The supply of groceries in the UK market investigation, 2008, final report, p. 168. 
248 This evidence takes the form of document submissions by operators (contracts, invoices, bank statements, etc.) 
and access to correspondence between buyers and suppliers (email exchanges). For example in terms of frequency 
the UK GCA investigation into Tesco stated that in relation to late payments “the frequency and scale of the issues 
identified go beyond what I consider to be an acceptable level of errors and resulted in business practices which 
were unfair”. 

53 

 
 
                                                                                                                                                             
national  UTP  rules,  including  evaluations  of  existing  policy.249  Only  the  UK  provided 
information  concerning  such  evaluation.  Despite  the  general  lack  of  ex  post  evaluations,  the 
direction for several  countries has  been  to  introduce  UTP legislation  where it did  not  yet exist 
and,  in  the  case  of  countries  where  it  did  exist,  for  it  to  be  further  developed,  albeit  without 
convergence of rules across Member States.250 This has also been the case in the UK, which has, 
in succession, introduced a voluntary code of conduct, then introduced specific legislation based 
on the code, then introduced an enforcement authority to improve the effectiveness of legislation 
and  eventually  improved  the  effectiveness  of  the  enforcement  authority  by  for  example 
introducing sanctioning powers. The UK continues to review the legislation (recently discussing 
the expediency to expand the protection under the code to farmers and small producers, as well 
as the list of what is considered a UTP).251 The resulting evidence indicates that the effectiveness 
of legislation has improved in the UK over the years. In the annual survey conducted by the UK 
Grocery Code Adjudicator, respondents reported fewer issues with UTPs year-on-year since the 
survey  was  first  implemented  four  years  ago252,  and  in  a  government  review  the  UK  Grocery 
Code  Adjudicator  was  deemed  to  be  performing  effectively  in  reducing  or  eliminating  several 
types of UTPs. 

"The majority of respondents to the Review felt that the GCA had been effective or very 
effective  in  exercising  its  investigation  and  enforcement  powers.  [...]  The  majority  of 
respondents also described the GCA as being effective in enforcing the Code. There is 
evidence  of  a  positive  shift  in  the  relationship  between  large  retailers  and  direct 
suppliers and an end to some of the unfair trading practices that were prevalent before 
the Adjudicator was appointed."253 

As regards the divergence of Member State rules, a minimum harmonisation of rules introduced 
at the EU level would lessen the existing divergence of UTP rules in Member States and thereby 
approximate - albeit not level - relevant business conditions for operators. 

6.2.1.2

  Harm 

Harm  from  UTPs,  which  is  the  reverse  side  of  the  "benefits"  expected  from  governance 
measures, is discussed in section 2.5 from the point of view of victims of  UTPs. The expected 
benefits  for  victims  from  UTPs  from  rules,  which  allow  their  deterrence  or  their  redress  once 
they  occur,  could  be  considered  to  constitute  harm  or  costs  for  those  operators  which  can  no 
longer  apply  them.  But  the  key  consideration  here  is  that  that  due  to  societal  conventions  of 
fairness  the  UTP-derived  benefits  should  not  accrue  in  the  first  place,  which  makes  that  the 
benefits outweigh this specific form of harm. 

As regards specifically the impact on farmers becoming victims of UTPs, there is evidence that 
UTPs have a direct impact on farmers’ costs and/or income.  

249 Question: “If your Member State has introduced or is considering introducing UTP rules, please share with us 
any  assessment  -  ex  ante  or  ex  post  (evaluation)  -  of  the  impact  of  the  respective  legislation  (such  as  impact 
assessments, studies etc.).” 
250 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p.35. 
251 UK, Groceries Code Adjudicator Review: Part 2 - Government response to the Call for Evidence on the case for 
extending the Groceries Code Adjudicator’s remit in the UK groceries supply, February 2018. 
252 UK, Tacon marks end of first term with survey showing significant progress for groceries suppliers, June 2017. 
253 UK, Groceries Code Adjudicator: statutory review, 2013 to 2016, July 2017, p. 3. 

54 

 
 
                                                 
While  uncertainty  is  inherent  in  doing  business,  certain  practices  unnecessarily  increase 
uncertainty.  Ex  post  (e.g.  changes  to  agreed  terms)  or  ex  ante  (e.g.  incomplete  contracts) 
practices may leave weaker parties unable to determine the likelihood, impact, type, or timing of 
commercially  relevant  events.  This  is  particularly  damaging  in  the  food  supply  chain,  in 
particular  for  agricultural  producers,  as  agricultural  production  is  already  subject  to  significant 
uncertainty  and  imponderability  (Annex  C).  For  example,  the  possibility  of  ex  post  price 
reductions, ex post requests for contributions to promotions, or last-minute cancellation of orders 
can  contribute  to  the  generation  of  uncertainty.  Where  liquidity  is  unexpectedly  compromised 
this may lead to otherwise viable businesses being unable to maintain their activity, for example 
by not being able to meet their credit obligations (a concern in particular for smaller operators 
who typically have a lower resilience to shocks).254 

Through price transmission and its asymmetric features in the food supply chain, UTPs are one 
of the elements that may result in an indirect negative impact on farmers, in particular in times of 
price  shocks  (excess  supply,  reduced  demand).255  The  negative  effects  of  UTPs,  even  if  they 
happen downstream of farmers, are liable to be transmitted upwards to them in the form of price 
pressure. However such indirect effects are likely to be influenced by the structure of the chain 
upstream compared to the level where a UTP takes place: for instance it may be that the operator 
immediately located upstream to the operator subject to a UTP has bargaining power relative to 
that  weaker  party  and  would  not  pass  on  any  effect  of  the  UTP  incurred  by  the  smaller  party 
downstream.256  Operators  who  are  exposed  to  UTPs  perceive  these  practices  to  affect  their 
profitability  and  to  deprive  them  of  added  value  that  they  would  otherwise  be  able  to 
appropriate.257  More  generally,  asymmetric  price  transmission  along  the  food  supply  chain 
means that while firms in an imperfectly competitive industry may be willing to pass on (to some 
extent) cost shocks through to consumers, they are less willing to reduce retail prices when costs 
subsequently  decline.258  Asymmetric  price  transmission  therefore  represents  a  sort  of  market 
failure  that  leads  to  a  skewed  distribution  of  welfare  and  may  even  induce  net  welfare  losses. 
While  there  is  no  hard  evidence  for  general  and  systemic  squeezing  of  farmers’  margins,  in  a 
comprehensive  literature  survey  it  was  found  that  in  about  half  of  all  cases  price  transmission 
was not symmetric.259 

Practices  that  unfairly  transfer  entrepreneurial  risks  can  also  lead  to  economic  inefficiencies 
through  a  misalignment  of  incentives.  This  may  involve  situations  over  which  the  operator  to 
whom  the  risk  is  transferred  has  little  or  no  control  as  they  are  taken  by  his  business  partner 
unilaterally and without sufficient predictability, or they may be included in the contract  but in 
way  that  shifts  risk  in  an  excessive  way  (no  win-win)  due  to  the  counterparty’s  exercise  of 
bargaining  power.  A  party  which  has  control  over  a  risk  but  can  transfer  it  to  a  weaker 

254 Annex F, Chief Economist of DG Competition, European Commission, Economic impact of unfair trading 
practices regulations in the food supply chain, 22 January 2018. See also UK Competition Commission, The supply 
of groceries in the UK market investigation, 2008, final report, pp. 167 and 170. 
255 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Falkowsky, p. 22-23. 
256 See OECD, 15 May 2014, Competition issues in the food chain industry, p. 13. 
257 See Dedicated Research for CIAA and AIM, Unfair commercial practices in Europe, presentation, March 2011: 
70% of the respondents consider UTPs to have a negative effect on their profitability (slide 15). Also see 
http://www.copa-cogeca.be/Download.ashx?ID=1558129&fmt=pdf.  
258 Idem, p. 30. Vavra, P. and B.K. Goodwin (2005), Analysis of Price Transmission along the Food Chain, OECD 
Food, Agriculture and Fisheries Working Papers No 3.  
259 Meyer, J. and S. von Cramon-Taubadel (2004), Asymmetric Price Transmission: A Survey, Journal of 
Agricultural Economics, 55, pp. 581-611.  

55 

 
 
                                                 
counterparty has reduced incentives to manage the risk effectively, while increasing total risk in 
the transaction and causing economic damage to its counterparty (moral hazard). For example, 
ex  post  claims  for  products  wasted  at  a  buyer’s  premise  can  transfer  undue  risk  to  the 
counterparty  and  make  it  less  likely  that  effective  countermeasures  are  taken  by  the  buyer  to 
avoid the future repetition of wastage or of erroneous planning.260  

Agricultural  producers  have  generally  been  subject  to  downward  pressure  concerning  their 
incomes and the share of the added value in the food supply chain that accrues to them has been 
diminishing.261  If  agricultural  producers  face  significant  financial  disadvantages  from  UTPs,  if 
they feel they cannot appropriate a fair share of the value added in the chain, or if they think they 
are  not  able  to  recoup  the  return  they  expect  from  their  investments,  they  not  only  face  lower 
incomes,  but  their  capacity  to  invest  may  also  be  compromised.  UTP  rules  including 
enforcement could counteract these effects. 

As  pointed  out  in  Annex  H,  potential  rules  on  UTPs  are  not  expected  to  result  in  a  negative 
impact  on  competition;  they  rather  tackle  unfair  practices  that  are  not  covered  by  competition 
law  and  constitute  shortcomings  often  due  to  conditions  of  ineffective  competition  due  to 
imbalances  of  bargaining  power  between  parties.  Unequal  bargaining  power  and  resulting 
imbalances  in  trading  relationships  only  rarely  imply  an  infringement  of  competition  law.  In 
such situations, a well-targeted regulation of certain trading practices aiming at ensuring fairness 
between actors in the food supply chain can help to resolve specific issues.262 

Possible  negative  effects  from  regulation  that  would  interfere  with  efficient  business  practices 
can be avoided by rules which are mindful of the arguments set out in Annex H and the research 
paper by the Joint Research Centre263 (as discussed in section 6.3.1). By doing so, negative side-
effects  of  UTP  rules  becoming  a  tool  used  to  change  balanced  commercial  relations  would  be 
significantly mitigated.  

Last but not least, an approach that focuses on the protection of weaker operators and that would 
therefore  not  affect 
large  parties  could  address 
proportionality concerns.264 

the  competitive  conditions  between 

6.2.1.3

  Costs 

The costs that would be incurred by operators depend to some extent on the form the legislation 
would  take.  The  main  costs  would  be  compliance  costs.  Compliance  costs  in  relation  to  UTP 
legislation  are,  generally,  costs  that  relate  to  training  and  compliance  in  the  strict  sense  of  the 
term. UTP rules would not impose active duties on operators to carry out certain activities; they 
rather  prohibit  certain  behaviour  that  is  deemed  unfair.  There  may  be  a  risk  that  broadly  or 

260 See Annex F, Chief Economist of DG Competition, European Commission, Economic impact of unfair trading 
practices regulations in the food supply chain, 22 January 2018. See also UK Competition Commission, The supply 
of groceries in the UK market investigation, 2008, final report, pp. 165-166. 
261 Report on competition law enforcement and market monitoring activities by European competition authorities in 
the food sector, May 2012, paragraph 38. See also Annex C. 
262 Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 1. 
263 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, in particular Sexton. 
264 See the concern about the skewing of margins between large operators. See EuroCommerce, 17 November 2017, 
paragraph 22. 

56 

 
 
                                                 
vaguely  defined  rules  would  prevent  efficiency-enhancing  practices  (win-win)  that  parties  to  a 
contract  may  agree  on.265  Care  should  therefore  be  taken  in  this  regard  when  defining  UTPs. 
Section 5.3.3 provides examples of how to define specific and predictable rules. 

These costs would be expected to be mainly one-off costs to ensure standard form contracts do 
not  include  such  clauses  (expected  to  be  primarily  borne  by  parties  with  stronger  bargaining 
power, as these tend to be those that present such contracts to their counterparties), and ongoing 
costs where contracts are based on individual negotiations (for example training costs to ensure 
that those negotiating and those drafting such contracts do not include prohibited clauses). These 
costs can be mitigated by introducing transition periods into legislation and through training and 
education on new rules by Members States competent authorities and the European Commission, 
thereby reducing uncertainty for businesses. According to a 2016 study, the aspects which were 
deemed by survey respondents (and especially by SCI members) to contribute most to the overall 
effectiveness of the initiative in tackling UTPs were the training of company staff on Principles 
of Good Practice and the appointment of contact person(s) for internal dispute resolution.266 

The answers to targeted questionnaires sent to undertakings do not allow firm conclusions as to 
the significance of these costs. Any such cost would be incurred according to the specific UTPs 
that  would  be  covered.  It  has  to  be  taken  into  account  that  compliance  costs  in  respect  of  the 
voluntary  code  established  under  the  SCI  have  (already)  been  incurred  by  its  signatories  who 
have  organised  training  and  incurred  corresponding  costs.267  A  large  retailer,  for  example,  has 
spent EUR 200,000 on one-off training measures of staff in relation to the SCI code of conduct. 
Judging by the results, there seems to be a general view that compliance costs are not of great 
significance or a major concern for the vast majority of business stakeholders participating in the 
surveys. In the survey to undertakings carried out for this initiative, more than half of the buyers 
who answered (57%) considered these costs as insignificant or only slightly significant. By way 
of  comparison,  Australia  has  introduced  legislation  on  standard  form  contracts  applying  to  all 
business sectors (i.e. not only the food supply chain) under certain coverage conditions, where it 
was estimated that total costs for compliance by operators stood at AUSD 50 million (about EUR 
32.7 million). In the UK case, compliance costs for the 10 retailers covered by legislation were 
estimated at a total of GBP 1.2 million per year (about EUR 1.36 million per year).  

Possible  unintended  consequences might  occur  if  operators  with  greater  bargaining  power  find 
alternative ways to shift risk and costs to weaker parties.268 

6.2.2 Impact on consumers including impact on innovation 

A partial harmonisation of UTP rules at EU level would be expected to have limited effects on 
consumers.  In  the  open  public  consultation,  operators  do  in  general  not  claim  that  the  use  of 
practices that are considered UTPs (e.g. by the SCI) lead to advantages for consumers through, 

265 Annex F, Chief Economist of DG Competition, European Commission, Economic impact of unfair trading 
practices regulations in the food supply chain, 22 January 2018. 
266 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, p. 226. 
267 See European Commission Communication, Tackling unfair trading practises in the business-to-business food 
supply chain, 15 July 2014, p. 13. 
268 However evidence that such effects occurred where national legislation was introduced is sparse; in the annual 
survey conducted by the UK Grocery Code Adjudicator respondents reported fewer issues with UTPs year-on-year 
since the survey was first implemented. 

57 

 
 
                                                 
for example, lower consumer prices extracted from upstream suppliers through UTPs, although 
negative  effects  on  consumer  prices  are  sometimes  argued  to  derive  from  below-cost-sales 
prohibitions  (not  covered  by  this  impact  assessment).269  Consumer  organisations  encourage 
public  UTP  rules  due  to  considerations  regarding  the  longer-term  negative  effect  of  UTPs  on 
consumers they expect.270 

As  regards  consumer  prices,  there  are  no  indications  that  Member  States  with  stringent  UTP 
regulation  have  witnessed  stronger  inflationary  effects  concerning  consumer  food  prices  than 
those with less stringent rules or no rules. The UK review of the UK adjudicator regime does not 
discuss  this.  The  correlation  -  if  any  (not  statistically  significant)  -  would  indicate  lower  food 
price  increases  in  Member  States  which  have  stringent  UTP  rules,  although  many  factors  can 
contribute  to  this.271  In  any  case,  a  monitoring  framework  (see  section  9)  could  control  for 
consumer  price  changes  in  relation  to  the  specific  UTPs  that  would  be  targeted.  Inflationary 
effects on consumer prices have however been argued in case of UTP rules prohibiting below-
cost sales.  

The literature is  not  conclusive concerning  the impact of unfair  trading practices  on operators’ 
ability  to  innovate  (see  section  2.5.1.2)  –  a  further  important  parameter  of  interest  in  terms  of 
consumer  welfare.  Evidence  of  long-term  innovation  effects  is  scarce,  the  difficulty  being 
compounded by confounding factors that are difficult to isolate. In some cases, listing fees and 
other types of upfront payments may be beneficial to innovation by compensating e.g. retailers 
for  the  risk  they  take  in  dedicating  shelf-space  to  innovative  products  and  facilitating  those 
innovations  that  are  seen  as  potentially  successful  by  their  suppliers.  In  other  cases,  such 
practices  are  increasing  the  cost  of  innovation,  putting  hurdles  for  small  innovators  and 
increasing vulnerability of suppliers to unfair termination or unilateral retroactive changes of the 
commercial relation. For example, listing fees applied ex post are more likely to result in a net 
negative impact on innovation (see Annex H). Such type of practice have as a likely effect the 
setting aside of capital by weaker parties to absorb possible future requests by the stronger party, 
with  a  negative  impact on the overall efficiency of business decisions. Businesses may be less 
likely  to  invest  in  production  capacity  and  quality,  production  efficiency  or  innovation,  with 
possible  longer-term  damage  to  consumer  welfare  (resulting  in  reduced  choice  or  quality  of 
products and increased prices in the future).  

6.2.3 Impact on Member States 

Member States would have to adapt their national legislation to measures introduced at the EU 
level. In case of a Directive, Member States are expected to transpose these rules into national 
law,  which  leaves  them  a  discretionary  margin  how  to  carry  out  this  transposition.  But  even  a 
Regulation  would  likely  require  Member  States  to  adopt  national  implementing  provisions,  at 
least  concerning  enforcement  and  cooperation.  In  the  case  of  a  non-binding  recommendation, 
Member States would ultimately decide whether and to which extent to follow suit.  

269 La Libération, Intermarché avait-il le droit de vendre ses pots de Nutella avec un rabais de 70%?, 30 January 
2018. 
270 Consumers International, The relationship between supermarkets and suppliers: What are the implications for 
consumers?, July 2012, summary, pp. 2, 4. See also three contributions to a European Commission targeted 
questionnaire to consumer associations in 2017. 
271 See European Commission Communication, Tackling unfair trading practises in the business-to-business food 
supply chain, 15 July 2014, p 12. See also Annex C, p. 11. 

58 

 
 
                                                 
UTPs  have  been  subject  to  a  variety  of  heterogeneous  legislative  measures  in  Member  States 
over  the  years.  Annex  F  and  Annex  G  provide  an  overview  of  Member  States’  instruments 
addressing  UTPs,  including  enforcement  aspects.  Accordingly,  the  majority  of  EU  Member 
States already provide for a governance framework for UTPs. Therefore, the impact of EU UTP 
rules  on Member State legislation will  depend  on the scope of these  existing national rules. In 
cases where there is  no framework at all, the Member State would have to implement the new 
measures,  including  designating  an  enforcement  authority.  On  the  other  hand,  suppliers  in 
Member States that currently do not have a UTP regime in place would benefit most from the 
introduction  of  one  (see  Table  below).  If  a  Member  State’s  existing  framework  already  goes 
beyond the proposed EU initiative, the Member State would have only to take limited measures 
in order to adapt the national framework to the EU initiative, while being able to keep more far-
reaching  rules  in  place.  Looking  at  the  diversity  of  Member  State  frameworks,  most  Member 
States would have to adapt their existing government framework to a certain degree in order to 
comply with the EU initiative.  

Benefit  
Introduction of a UTP regime (Annex F, Table n.1)  
More comprehensive UTP approach (Annex F, Table n.1)  
Extension of UTP regime beyond retailers (Annex F, Table 
n.3)  
Added enforcement of UTP rules (Annex F, Table n.6 & n.7)  

Level playing field for competition  
Coordination across MS  

Potential impact  
Benefitting MS 
Large 
4 (EE, LU, MT, NL) 
4 (BE, DK, FI, SE) 
Medium  
5 (LT, CZ, HU, IE, UK)   Medium 

8 (EE, LU, MT, NL,  
BE, DK, FI, SE)  

28 (all)  
28 (all)  

Medium 

Small 
Medium  

Table 3: Overview of the benefits of the proposed UTP measures 

Further  national  costs  are  those  related  to  the  enforcement  of  legally  binding  rules  (via  the 
application  of  a  general  prohibition  or  in  the  form  of  prohibited  specific  UTPs).  For  some 
Member  States,  EU  rules  on  UTPs  would  not  necessitate  significant  changes  to  their  UTP 
regimes  as  they  already  apply  national  rules  that  generally  prohibit  UTPs  and  have  entrusted 
enforcement  to  competent  authorities.  These  Member  States  would  not  incur  significant 
additional  enforcement  costs.  For  Member  States  that  do  not  have  UTP  rules,  EU  measures 
would require adaptation, in particular with a view to enforcement. 

The designation of a competent authority in Member States would be a first necessary step under 
a  minimum  requirement  approach  at  EU  level  that  relies  on  public  enforcement.272  Member 
States that  have  no competent authority  should be given appropriate time to  designate one. As 
there  would  be  no  formal  requirement  other  than  being  vested  with  the  minimum  functionally 
defined enforcement powers, Member States could rely on existing structures and designate, for 
example, an existing authority (a national competition authority or a consumer protection autho-
rity).273  Member  States  with  experience  in  UTP  enforcement  note  that  significant  savings  of 
administrative  costs  can  be  achieved  by  concentration  and  utilisation  of  sources  that  already 
exist.274  Minimum  guarantees  would  not  enshrine  a  right  for  one’s  case  to  be  taken  up  and 

272 See British Institute of International and Comparative Law, Fair Relations in the Food Supply Chain - 
Establishing Effective European Enforcement Structures, paper of 2014, in favour of enforcement in Member States 
273 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p. 20. 
274 E.g. Czech Republic in replying to a targeted questionnaire sent by the European Commission to Member States. 

59 

 
 
                                                 
pursued by a competent authority; Member States’ authorities  would be able to prioritise cases 
according to their own judgment.  

In a targeted questionnaire, Member States were asked to provide estimates on the possible set-
up  and  yearly  operational  costs  of  national  bodies  dealing  with  the  implementation  and 
enforcement of UTP related legislation, as well as on possible additional costs linked to an EU 
action on UTPs, including costs on reporting and coordination. Limited data has been presented 
as it seems difficult for Member States to provide estimates and isolate the costs for the specific 
activities  related  to  implementation  and  enforcing  of  UTP  measures.  Most  of  the  difficulties 
relate  to  the  determination  of  the  costs  of  drafting  and  adopting  national  legislation.  From  the 
information  provided  by  Member  States  that  currently  have  UTP  legislation  and  competent 
authorities275,  the  set-up  costs  vary  between  EUR  32,000276  and  EUR  3  million277,  the 
operational  yearly  costs  vary  between  EUR  10,000278  and  EUR  2.9  million279.  The  differences 
relate to the size of the country – and therefore the national market – and the level of ambition of 
Member States’ current UTP legislation. 

Example  data  on  actual  incurred  costs  (i.e.,  not  estimated)  are  available  from  the  UK  Grocery 
Code  Adjudicator.  Expenditure  was  GBP  1,785,741  in  the  2015/2016  financial  year,  and  GBP 
622,024  in  the  2016/2017  financial  year.  Most  of  the  difference  is  due  to  a  large-scale 
investigation  into  one  retailer  in  2015/2016.  In  the  2016/2017  financial  year  most  of  the  costs 
incurred  were  staff  costs,  at  67%.  The  UK  GCA’s  costs  are  funded  by  a  levy  on  the  retailers 
covered  by  the  scheme.  In  2016/2017,  the  levy  was  raised  to  GBP  2  million  (from  GBP  1.1 
million  in  the  previous  year),  to  fund  future  investigations.  Unspent  money  from  the  levy  is 
returned to the contributing retailers at the end of each financial year.280 

Taking  the  above  as  a  reference,  and  assuming  full  funding,  setting  up  a  fully  functioning 
enforcement authority with one active large-scale investigation per year would imply a cost of up 
to  EUR  2.3  million  per  year  .  This  figure  may  vary  to  an  extent  according  to  the  size  of  the 
Member State (as some correlation between enforcement activity and the dimension of economic 
activity  in  the  Member  State  can  be  expected).  For  Member  States  where  there  already  exists 
specific legislation on UTPs, already covering the UTPs identified in the preferred option, and 
with an existing public competent authority with effective enforcement powers, additional costs 
from  EU  action  are  expected  to  be  negligible  (and  benefits  to  pertain  mainly  to  positive 
coordination effects with other competent authorities and the levelling of the playing field vis-à-
vis competitors in other Member States). Where one or more of those elements are missing, both 
costs  and  benefits  are  expected  to  be  greater  (in  the  extreme,  where  no  legislation  –  and  thus 
enforcement  –  exists,  full  estimated  costs  could  be  incurred;    and  fuller  benefits  related  to  the 
introduction  of  protection  from  UTPs  with  effective  enforcement,  as  well  as  coordination  and 
level-playing field benefits, would materialise). 

Focusing  on  the  information  from  three  Member  States  with  well  established,  functioning  and 
experienced  competent  authorities,  the  additional  costs  linked  to  EU  action,  including  the 

275 Hungary, Latvia, Poland, Slovakia, Bulgaria, UK, Czech Republic and Spain. 
276 Latvia 
277 Spain 
278 Latvia 
279 Spain 
280 Groceries Code Adjudicator, Annual report and accounts, 2016-17. 

60 

 
 
                                                 
activities related to reporting and EU coordination, would be absorbed by the current structures 
and,  therefore,  according  to  their  estimates,  not  be  very  significant.  281  Additional  costs  for 
Member  States  may  occur  from  coordination  activities  with  competent  authorities  in  other 
Member States and from reporting obligations (see section 6.3.5).  

6.2.4 Social and environmental impacts 

In terms of social impact, complementing the SCI with mandatory UTP rules including effective 
enforcement requirements may lead to an increase in trust between partners and a strengthening 
of the SCI, encouraging farmers’ associations to sign up to the SCI’s code of conduct and dispute 
resolution.282  In  general,  predictability  of  business  relations  could  be  improved  by  governing 
UTPs  at  the  EU  level  and  enhancing  enforcement  modalities  applicable  in  Member  States. 
Increased trust between operators should have a positive economic impact.283 An EU approach 
concerning  UTPs  would  aim  at  a  positive  impact  in  terms  of  social  cohesion  by  virtue  of 
approximating commercially relevant conditions for operators active in the production and trade 
of food products in Member States. 

One would not expect the positive effects of voluntary (national) platforms governing UTPs to 
be  negatively  impacted  by  EU  UTP  rules:  in  many  Member  States  these  voluntary  initiatives 
have  co-existed  with  national,  publicly  enforceable  UTP  rules.  In  fact,  complementarity  may 
have  a  positive  effect  on  the  voluntary  initiatives  as  public  enforcement  possibilities  could 
enhance the importance for both parties of voluntary dispute resolution.  

Finally,  UTP  rules  are  not  expected  to  have  a  significant  direct  impact  on  the  environment.284 
Economic operators who are not subject UTPs may however be left with more economic margin 
to invest in producing in environmentally sustainable and climate-friendly ways and to prevent 
food waste.285 Food waste is a common side-effect of particular types of UTPs and addressing 
the systemic issue within the European grocery supply chain could be an opportunity to address 
both  the  commercial  losses  incurred  by  suppliers  and  food  waste.286  Tackling  food  waste  has 
been identified as a priority in the EU's Circular Economy package. 

6.3

Impact of the specific option components  

This section considers the effects of the various policy options taking into account the benefits 
and costs for stakeholders as described in section 5. The policy option relating to the “degree of 
harmonisation”  is  not  discussed  as  only  “partial  harmonisation”  was  retained  in  section  5 
(“detailed harmonisation” having been discarded).  

281 UK, Spain and Czech Republic. 
282 See European Commission Communication, Tackling unfair trading practises in the business-to-business food 
supply chain, 15 July 2014, pp. 9 and 13. 
283 See, for example Dakhli, M. & De Clercq, D. (2004), Human capital, social capital, and innovation: a multi-
country study. Entrepreneurship & Regional Development. 16 (2). pp.107-128; B.-Y. & Kang, Y. (2014) Social 
capital and entrepreneurial activity: A  pseudo-panel approach, Journal of Economic Behavior & Organization, 97. 
pp. 47-60. Bloom, N., Sadun, R. & Reenen, J. Van (2009), The  organization of firms across countries (No. 
w15129), National Bureau of Economic Research. 
284 In the open public consultation, “programmed overproduction leading to food-waste” was mentioned by 
respondents as a possible UTP, ranking 11th of the trading practices listed by respondents as unfair. 
285 See SOMO, Centre for research on multi-national companies, reply to consultation, November 2017, p. 3. 
286 See EU REFRESH project. 

61 

 
 
 
                                                 
6.3.1 Scope  of  UTP  rules:  Specific  list  of  prohibited  UTPs  or  general  (‘principles-based’) 

prohibition 

The  following  table  summarises  in  a  simplified  form  the  normally  expected  net  benefits  and 
costs of each of the six UTPs discussed in section 5.3.3. The determinant factor for net gains is 
the possible efficiencies a practice may bring about when agreed “ex ante” by parties and aiming 
at a win-win outcome.  

Potentially unfair trading 
practice 

Option 

Ex ante / ex post 

Net effect of regulation 

Unilateral and retroactive 
changes to contracts 

No unilateral retroactive 
changes to contracts  

Ex post 

Last-minute order 
cancellations  concerning 
perishable products 

Last minute to be defined 
in provision 

Ex post 

Claims for wasted or unsold 
products 

Risk for non-sale must be 
carried by buyer. Shifting it 
to seller is prohibited as 
UTP 

Payment periods longer than 
30 days for perishable 
products 

Supplier must be paid 
within 30 days from date of 
invoice submitted 

Contributions to promotional 
or marketing costs of buyer 

Prohibition to ask or 
implement such 
contributions under 
conditions to be specified 

Requests for upfront 
payments to secure or retain 
contracts 

No payments unrelated to 
any consideration other 
than entering into business 
relationship 

Ex post 

Ex ante 

Ex ante 

Ex post 

Ex ante 

Ex post 

+ 

+ 

+ 

+ 

-287 

+ 

-288 

+ 

Table 4: “+” = positive impact on operators, “-“ = negative impact on operators 

The  possible  negative  economic  impact  of  a  short  list  of  specific  prohibited  UTPs  for  certain 
operators  would  seem  circumscribed.  Concretely  formulated  prohibitions  targeting  specific 

287 See the discussion in section 5.3.3.5. 
288 See the discussion in section 5.3.3.6. 

62 

 
 
                                                 
UTPs would aim  to  limit legal uncertainty  for commercial transactions. If the code  of conduct 
established by the SCI was taken as inspiration for such prohibited specific UTPs, the difference 
for SCI participants with the current situation would mainly lie in rendering the UTPs discussed 
in  this  Impact  assessment  enforceable;  public  (administrative)  enforcement  would  complement 
the voluntary dispute resolution mechanism foreseen by the SCI.  

Member  States  already  providing  for  UTP  legislation  would,  depending  on  the  scope  of  their 
legislation, have to adapt their legislation to the EU initiative or introduce adjustments. Member 
States  which  have  no  rules  would  have  to  make  these  UTP  prohibitions  part  of  their  national 
regimes. 

A general prohibition would constitute a suitable way of a common protection against UTPs in 
the EU and thus reduce the dissimilarity of UTP rules in Member States. A general prohibition 
leaves  flexibility  to  enforcement  authorities  and,  as  such,  enables  capturing  a  larger  array  of 
unfair  practices;  practices  would  not  a  priori  be  excluded  from  the  EU  provisions’  purview 
because they do not match a concretely formulated and prohibited UTP.  

A general prohibition has necessarily to remain vague and leave its case-by-case application to 
enforcement authorities. An ensuing lack of predictability of the interpretational outcomes could 
imply  transaction  costs  for  operators.289  This  shortcoming  could  be  mitigated  by  linking  the 
legislation  and  potential  sanctions  to  a  specific  code  of  conduct  that  could  be  established  and 
managed by all the relevant partners in the supply chain (see the Spanish UTP system).  

Having  said  this,  EU-wide  rules  imply  aligned  application  by  Member  States.  This  could  be 
ensured  through  a  coordination  mechanism  and,  possibly,  through  the  possibility  for  the 
European Commission to provide guidance where appropriate. The question arises to what extent 
such a generally formulated EU prohibition could remain complementary to existing UTP rules 
in  Member  States  and  ensure  complementarity  and  subsidiarity.290  It  is  likely  that  a  generally 
clause would have a harmonising impact on national UTP rules. A general prohibition could thus 
come  to  de  facto  entail a  degree  of  harmonisation  that  could  give  rise  to  tension  in  relation  to 
Member  States’  existing  regimes.  A  short  list  of  specific  prohibited  UTPs  would  avoid  this 
effect. 

6.3.2  Coverage  of  products:  agricultural  products  or  agricultural  and  processed  agricultural 

products 

If UTP rules applied only to agricultural products as defined in the TFEU, it would be likely that 
there would be some positive de facto spill-over operators trade both agricultural and processed 
agricultural  products.291  However,  processed  agricultural  products  would  not  be  covered  and 
unequal treatment of similar situations could arise. This may on the one hand negatively impact 

289 See for instance Commission report on the implementation of Directive 2011/7/EU on combating late payment 
in commercial transactions, 26 August 2016, p. 26. See also SEO economisch onderzoek, Oneerlijke 
handelspraktijken, report for the Dutch ministry of economy, 2013, pp. 20-21. 
290 See for instance Max Planck Institute for Intellectual Property and Competition Law, IIC (2013) 44:701–709, 23 
August 2013, p. 707. 
291 Such buyers may not differentiate his business behaviour in accordance with the characterisation of some of the 
products he purchases as processed agricultural products. However, in cases where the supply relationship 
concerned only processed agricultural products, the UTP rules would not apply and any possible spill-over effect 
would therefore be unlikely. 

63 

 
 
                                                 
producers of non-agricultural food products as they would not be covered by UTP rules; it could, 
on the other hand, mean a potential disadvantage for producers of agricultural products, should 
some of the demand for their products shift to processed agricultural products as they would not 
be subject to UTP rules (e.g. less legal risk for purchasers to be confronted with UTP claims). 
Covering  both  agricultural  products  and  processed  agricultural  products,  that  is  to  say  food 
products, would avoid these negative impacts. 

6.3.3 Scope  in  terms  of  operators:  (i)  all  operators  in  the  food  supply  chain  protected  or 
protection  restricted  to  weaker  operators;  (ii)  question  of  coverage  of  third-country 
suppliers 

A  comprehensive  coverage  of  operators  in  the  food  supply  chain  would  be  in  line  with  the 
voluntary  SCI  approach.  But  it  could  cause  smaller  operators  (e.g.  SMEs  and  farmers) 
compliance  costs  when  compared  to  UTP  rules  applying  only  to  operators  having  significant 
bargaining  power.  Having  said  this,  given  that  smaller  operators  would  normally  not  be  in  a 
position to resort to UTPs any attending compliance costs could be expected to be rather limited. 

In  relation  to  the  comprehensive  coverage,  retailers  have  expressed  concerns  relating  to  the 
protection of large manufacturers under such an approach and the ensuing possible impact on the 
customary  distribution  of  margins  between  retailers  and  these  large  manufacturers.292  Retailers 
state they distinguish between these relationships and the ones they have with farmers and small 
producers of food products.293 

Under  a  restricted  approach  as  discussed  in  section  5.5.2,  a  retailer’s  relationship  with  a  large 
manufacturer  of  food  products  would  not  be  constrained  by  UTP  rules.  An  approach  which 
provides protection from UTPs for only smaller operators in the food supply chain would also be 
congruent  with  the  problem  driver  “imbalance  of  bargaining  power”.  A  case-by-case approach 
ascertaining  the  existence  of  an  imbalance  would  enable  targeting.  It  would,  however,  be  less 
predictable  for  operators  than  an  approach  which  relates  its  protective  effect  to  the  size  of  an 
operator as measured by a proxy, such as for example his SME status. 

Under a restricted approach, care should be had that the protection does not come to constitute a 
competitive disadvantage for small suppliers as their counter-parties would shift – in the interest 
of  their  ability  to  continue  to  apply  UTPs  -  their  trading  activities  to  operators  which  do  not 
enjoy  such  protection.  The  risk  of  such  an  unintended  consequence  may  however  be  partially 
mitigated by the fact that it is be harder to use UTPs against parties which have a significant size 
and  bargaining  power;  shifting  trade  is  therefore  less  likely  to  constitute  a  recipe  to  keep  the 
benefits from applying UTPs. At any rate, monitoring modalities could control for such effects. 

As  regards  3rd  country  suppliers  and  their  coverage  and  ability  to  complain  to  competent 
authorities in Member States, their non-coverage could result in competitive distortions and trade 
diversion;  buyers  would  have  incentives  to  source  from  foreign  suppliers  who  would  not  be 
protected by UTP rules.294 Defining the scope of application of national UTP rules disregarding 
the international dimension of supply chains may lead to leave relevant practices out of reach of 

292 EuroCommerce, 17 November 2017, paragraph 22. 
293 Ibidem. 
294 See Eucofel, European Fruit and Vegetables Trade Association, reply to open public consultation, November 
2017, pp. 2-3. See also British Institute of International and Comparative Law, Fair Relations in the Food Supply 
Chain - Establishing Effective European Enforcement Structures, paper of April 2014, p. 11. 

64 

 
 
                                                 
enforcement  authorities.295  In  addition,  discrimination  considerations  also  militate  in  favour  of 
covering 3rd country suppliers. 

6.3.4 Enforcement: minimum requirements or minimum requirements "plus" 

The  option  of  centralised  enforcement  was  discarded  at  an  early  stage  (section  5).  The  key 
difference  between  the  remaining  options,  namely  ‘minimum  requirements’  and  ‘minimum 
requirements plus’, is which enforcement powers are attributed to national authorities, with the 
latter  option  covering  wider  powers.  Notably,  these  would  include  broader  acceptance  of 
complaints, the ability to extend mutual assistance in cross-border cases, and to use fines and the 
publication  of  results  of  cases  as  behavioural  deterrents.  A  ‘minimum  requirements  plus’ 
approach would thus offer more tools aiming at effective enforcement. UTP legislation in several 
Member States already covers some of these powers. Where such additional enforcement powers 
exist these have in general not led to a large impact in absolute costs for the operation and set-up 
of competent authorities. Having said this, the cost of own-initiative investigations can account 
for a large share of additional total costs (see for example the UK Grocery Code Adjudicator). 

6.3.5 Coordination: network of dedicated authorities or baseline (High Level Forum) 

The High Level Forum option is the baseline option, which is not expected to cause significant 
additional costs in future. A network of dedicated enforcement authorities would be expected to 
offer  greater  technical  capability  with  more  effective  evidence-based  outcomes.  The  network 
approach  would  lead  to  additional  coordination  and  travel  costs  for  the  relevant  competent 
authorities. 

The  value  of  coordination  would  lie  in,  as  mentioned  before,  working  towards  the harmonised 
application of EU UTP rules as well as – and importantly - building a Member States’ network 
of enforcement authorities that could serve to gather relevant information and disseminate best 
practices. As such, this can help addressing the problems of a lack of effective redress and the 
uneven protection against UTPs in the EU. It would furthermore allow building knowledge about 
UTPs  at  the  EU  level  that  can  serve  the  evaluation  of  the  policy  as  well  as  its  adjustment,  if 
needed, over time. According to Member States, the costs of annual reporting would go from no 
additional  costs,  as  they  would  be  integrated  in  the  existing  operational  costs,  to  up  to  EUR 
20,000.  Member  States  were  asked  through  a  targeted  questionnaire  to  provide  estimates  for 
yearly  costs  of  participating  in  an  annual  coordination  meeting  in  Brussels.  The  median  value 
stated,  to  be  incurred  by  Member  State  competent  authorities,  is  EUR  950  per  year  (average 
EUR 1,327). The financial burden for national administrations as regards these actions related to 
a coordination mechanism can therefore be considered to be relatively limited. In addition, the 
costs for the Commission of organising the coordination meeting are estimated at EUR  17,000. 
ITC  costs,  mainly  related  to  setting  up  and  running  an  online  coordination  platform,  are 
estimated at EUR 50,000. 

6.3.6 Legal instrument: soft law (recommendations) or legally binding instrument 

The  question  whether  soft  law  measures  would  suffice  in  achieving  the  objectives  has  to  be 
considered in the context of previous Communications of the European Commission on the topic 
of  UTPs.  In  2009,  the  European  Commission  considered  that  action  was  “needed  to  eliminate 

295 See Annex F, Cafaggi and Iamiceli, Overview on Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, February 2018, p.14. 

65 

 
 
                                                 
unfair  contractual  practices  between  business  actors  all  along  the  food  supply  chain”.296  It 
encouraged Member States to exchange information and best practices. The Commission set up 
the High Level Forum on the Better Functioning of the Food Supply Chain in 2010. In 2014, a 
Communication made certain suggestions addressed to Member States as regards governance of 
UTPs.  It  suggested  a  combination  of  voluntary  and  regulatory  frameworks  and  mentioned  that 
particular  attention  should  be  given  to  confidentiality  of  complaints  and  national  authorities 
should have the ability to conduct investigations.297 Cooperation among enforcement authorities 
was  again  mentioned  as  important.  The  European  Commission  January  2016  report  revisited 
some of these issues and made recommendations. 

While developments of the voluntary initiatives, in particular the SCI and the national platforms, 
have  occurred,  the  suggestions  and  efforts  aiming  at  creating  some  kind  of  minimum  standard 
among  Member  States  and  stepping  up  enforcement  have  not  led  to  the  desired  results  (see 
section 3.3 above). As has been shown, there are Member States which continue to have no rules 
that would cover UTPs, lack competent enforcement authorities or effective redress modalities.  

In the light of the above, the use of a legally binding instrument would achieve added value. 

6.4

  Option packages 

Viable policy option packages – assembled from the options set out in section 5 which have been 
assessed as to their impacts in section 6 - are set out in the table below. They embody different 
degrees of stringency of the EU approach proposed, from relatively wide regulatory coverage to 
a  lighter  and  merely  recommended  framework.  Other  combinations  would  have  been  possible, 
but some choices have to be made in order to carry out the comparative exercise. In any case, the 
European Commission can decide on any different “mix and match”.  

The four packages have in common that they propose a partial harmonisation of UTP rules at the 
EU  level  (in  Package  4  via  a  recommendation).  Package  1  pursues  a  partial  harmonisation  by 
regulation  and  by  way  of  a  principle-based  prohibition  of  UTPs.  Alternatively,  a  short  list  of 
specifically prohibited UTPs can be drawn up (Packages 2, 3 and 4). The rules can apply to food 
products  (Packages  1,  2  and  3)  or  to  agricultural  products  (Package  4).  The  UTP  rules  can 
protect  all  food  supply  chain  operators  (Packages  1  and  2)  or  a  select  group  that  would  be 
deemed worthy of protection (Packages 3 and 4). A recommendation would constitute a soft law 
option for public governance (Package 4) while a regulation (Package 1) or a directive (Packages 
2  and  3)  would  introduce  mandatory  measures.  Packages  1,  2  and  3  would  require  more 
elaborate  enforcement  powers  for  Member  States’  competent  authorities  than  Package  4.  Last 
but  not  least,  Packages  1,  2  and  3  would  include  coordination  between  Member  States 
enforcement  authorities  and  the  European  Commission  while  Package  4  would  provide  for  a 
continued  high-level  discussion  of  food  supply  chain  issues  in  the  High  Level  Forum  on  the 
Better Functioning of the Food Supply Chain. 

296 European Commission, Communication on a better functioning food supply chain, 28 October 2009, p. 7. 
297 European Commission Communication, Tackling unfair trading practises in the business-to-business food supply 
chain, 15 July 2014, pp. 12-13. 

66 

 
 
 
 
                                                 
Package 1 

Package 2 

Package 3 

Package 4 

General coverage & 
enhanced 
enforcement and 
coordination 

Targeted coverage  
all operators & 
enhanced 
enforcement and 
coordination 

Targeted coverage -  
protection of SMEs 
& enhanced 
enforcement and 
coordination 

Targeted coverage -  
protection of SMEs 
& enforcement and 
coordination 
(recommendation) 

Scope of UTP 
rules 

Principle-based 
prohibition of UTPs 

Specific UTPs listed 
as prohibited 

Specific UTPs listed 
as prohibited 

Specific UTPs listed 
as prohibited 

Coverage of 
products 

Agricultural and 
processed 
agricultural products 

Agricultural and 
processed 
agricultural products 

Agricultural and 
processed 
agricultural products 

Agricultural 
products 

Coverage of 
operators 

All operators 

All operators 

Protection of SMEs 
across the chain 

Protection of SMEs 
across the chain 

Enforcement 

Minimum 
requirements "plus" 

Minimum 
requirements "plus" 

Minimum 
requirements "plus" 

Minimum 
requirements 

Coordination 

Network of 
competent 
authorities 

Network of 
competent 
authorities 

Network of 
competent 
authorities 

Baseline (High 
Level Forum) 

Instrument 

Regulation 

Directive 

Directive 

Recommendation 

Table 5: option packages 

7  How do the options compare? 

The option packages presented in section 6.4 combine components which have been described in 
section 5 as potentially effective with a view to achieving the policy objectives. The options have 
been  assessed  as  to  their  impacts  and  their  efficiency  in  section  6.  In  Annex  E,  the  different 
options are assessed qualitatively in terms of their effectiveness and efficiency (on a range going 
from "more effective / "more efficient than the baseline" to "more ineffective / more inefficient 
than the baseline"). By doing so, a qualitative assessment of the effectiveness and efficiency of 
each package is carried out. The following table provides an overview of the results. 

67 

 
 
 
 
 
 
 
Package 1 

Package 2 

Package 3 

Package 4 

General coverage & 
enhanced 
coordination and 
enforcement 

Targeted coverage  
all operators & 
enhanced 
enforcement and 
coordination 

Targeted coverage -  
protection of SMEs 
& enhanced 
enforcement and 
coordination 

Targeted coverage -  
protection of SMEs 
& enforcement and 
coordination 
(recommendation) 

s
s
e
n
e
v
i
t
c
e
f
f
E

+ 

+ 

++ 

++ 

++ 

+ 

+ 

Degree of 
harmonisation 

Scope of UTP 
rules 

Coverage of 
operators 

Coverage of 
products 

Enforcement 

Coordination 

Instrument 

y
c
n
e
i
c
i
f
f
E

+ 

- 

0 

0 

+ 

0 

- 

s
s
e
n
e
v
i
t
c
e
f
f
E

+ 

+ 

++ 

++ 

++ 

+ 

+ 

y
c
n
e
i
c
i
f
f
E

+ 

0 

0 

0 

+ 

0 

0 

s
s
e
n
e
v
i
t
c
e
f
f
E

+ 

+ 

++/+ 

++ 

++ 

+ 

+ 

y
c
n
e
i
c
i
f
f
E

+ 

0 

+ 

0 

+ 

0 

0 

s
s
e
n
e
v
i
t
c
e
f
f
E

+ 

+ 

++/+ 

+ 

+ 

0 

0 

y
c
n
e
i
c
i
f
f
E

+ 

0 

+ 

- 

+ 

0 

0 

Table 6: Qualitative assessment of the effectiveness and efficiency of the option packages 

8  Preferred option 

The above option package 3 ("Protection of SMEs & enhanced coordination and enforcement") 
is retained as the preferred one with a view to addressing the problem defined and achieving the 
objectives  pursued.  It  is  more  effective  in  achieving  the  specific  objectives  than  Package  4, 
thanks to  a  broader coverage  in  terms of  operators  (in the food supply chain),  of  products  and 
more  extensive  enforcement  arrangements  as  well  as  its  mandatory  character.  It  is  likely  to 
perform  equally  well  in  terms  of  effectiveness  as  a  more  exhaustive  approach  where  all  UTPs 
would  potentially  be  covered through  a  general  UTP  prohibition  (Package  1)  or  an  option  that 
would  cover  all  operators  across  the  chain  regardless  of  their  size  (Package  2).  Package  1  is 
characterised  by  a  risk  of  legal  uncertainty  for  operators  in  the  food  supply  chain  due  to  its 
potential tension with Member States’ general clauses. Package 2 entails a risk of not being fully 
proportionate  in  relation  to  the  problem  defined  as  well  as  the  objectives  pursued  and  is, 
therefore, deemed less efficient than Package 3.  

Package  3  takes  into  account  concerns  that  UTP  rules  would  interfere  in  commercial 

68 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
relationships  between  operators  which  are  not  characterised  by  an  imbalance  of  bargaining 
power  and  where  UTPs  would  therefore  be  less  likely  to  occur  in  the  first  place.  It  would 
practically  mean  that  commercial  relationships  between  large  operators  would  not  be  covered 
while sales of food products by an SME supplier to a non-SME buyer would be. As regards the 
scope of the rules and their proportionality, the UTP approach under Package 3 would also take 
into  account  mutually  beneficial  efficiency  gains  deriving  from  agreed  arrangements  between 
parties (ex ante situations referred to in Annex H298). The corresponding UTP definitions  would 
be  subject  to  the  criteria  described  in  section  5.3.3.7  (“Criteria  concerning  the  assessment  of 
unfairness”). The endorsement of a directive as the relevant instrument for UTP measures would 
be  mindful  of  subsidiarity:  a  directive  enables  Member  States  to  choose  the  means  of  how  to 
integrate an EU minimum standard of protection into their national regimes.  

9  Monitoring and evaluation 

The  Commission  would  monitor  and  evaluate  the  impacts  of  the  proposed  policy  option  on 
business-to-business  unfair  trading  practices  in  the  food  supply  chain.  The  option  seeks  to 
achieve  the  specific  objectives  described  above.  The  approach  is  based  on  synergies  with 
national rules and voluntary initiatives. As has been shown, the EU measures root in identified 
trading  practices  for  which  there  is  a  consensus  regarding  their  unfair  nature  and  require  a 
common set of minimum enforcement modalities, including coordination mechanisms among the 
national authorities. 

The application of the EU rules and their impact should be monitored based on annual reports by 
Member States to the European Commission. Such reports should primarily detail the activity of 
enforcement  authorities  in  terms  of  e.g.  the  number  of  complaints  received  (confidentially  or 
not), the number of investigations launched (own initiative or upon request) and share of cases 
resulting  in  findings  of  an  infringement.  The  annual  reports  should  be  discussed  by  the 
Commission and the national competent authorities in an ad hoc expert group (see section 5.7.2). 
The specific mandate for such a cooperation forum remains to be determined but could include 
making recommendations based on best practices identified in Member States.  

The efficiency of a public enforcement regime is not necessarily a function of the number of its 
enforcement cases; nor can its effectiveness be measured by exclusively counting decisions by 
competent  UTP  authorities.299  Therefore,  annual  reports  should  not  be  limited  to  pure 
implementation  data  but  could  also  cover  concrete  practices,  with  a  view  to  facilitate  the 
adoption of best practices. 

The  monitoring  arrangement  accompanying  the  EU  framework  should  in  general  enable  the 
gathering  of  “hard  data”  and  information  on  UTPs.  This  could  cover  both  the  EU  regulated 

298 See Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018. 
299 UK, Statutory review of the Groceries Code Adjudicator: 2013-2016, July 2017. See also Renda - Cafaggi, 
Study on the legal framework covering business-to-business unfair trading practices in the retail supply chain, final 
report, 26 February 2014, p. 110: “[...] it is important to recall that the level of litigation on a specific legal rule 
cannot be interpreted as a univocal signal of its effectiveness, under the assumption that more effective rules always 
lead to more litigation. As a matter of fact, rules can generate confusion or problems of interpretation: often the 
more rules are vague and unclear, the more there will be litigation on their application. At the same time, effective 
rules can also be rules that successfully deter infringing behaviour [...]”. 

69 

 
 
                                                 
UTPs,  as  well  as,  to  the  extent  Member  States  show  openness,  other  UTP  rules  in  national 
provisions or voluntary guidelines. A further tool to gather information and enable an evaluation 
to be carried out can be anonymous surveys of undertakings active in the food chain, such as the 
UK  grocery  adjudicator  or  the  SCI  currently  undertake  on  an  annual  basis.  The  European 
Commission should also directly carry out or commission economic studies aiming at measuring 
the  impact  of  the  different  practices  concerned  by  national  rules  and  voluntary  initiatives  at 
micro- and macro-economic level. 

The Commission will closely follow the interaction and complementary effects of the proposed 
policy option and the voluntary Supply Chain Initiative.  

The impact of the EU’s action in the form of UTP measures as set out in the proposed option in 
this  impact  assessment  should  be  assessed  4  years  after  entry  into  force  of  the  adopted 
instrument. This should take the form of a European Commission report to the legislator. A non-
exhaustive list of possible monitoring indicators is shown in the table below. 

Specific objectives 

Source 

Indicators 

Reduce occurrence of UTPs 

Contribute to level playing field 

Enable effective redress 

- 

- 

- 

- 

- 

- 

Annual survey to 
undertakings 
Members States 
annual reports 

Members States 
annual reports and 
annual meeting of 
enforcement 
authorities 
Eurostat/national 
statistics / EU and 
national market, 
prices/ costs 
observatories 

Members States 
annual reports 
Eurostat / national 
statistics / EU and 
national market, prices 
/ costs price 
observatories 

- 

- 
- 

- 

- 

- 

- 

- 

- 

- 

Declared occurrences of each UTP 
concerned by undertakings (share of firms 
declaring and frequency declared, perceived 
costs of UTPs) 
Compliance costs for firms 
Potential effects of trade diversion to the 
detriment of protected parties 

Alignment of application of UTP rules (e.g. 
number of changes to national rules with a 
view to approximate practices)  
Number of best practices recommendations 
adopted 
Declared administrative costs for Members 
States 
Relative production and consumer price 
changes 

Number of complaints received 
(anonymously or not) 
Number of mediation meetings, if applicable 
Number of investigations launched (own 
initiative or upon request)  
Share of cases resulting in findings of an 
infringement 

Table 7: Monitoring and evaluation 

 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
List of Annexes 

Annex 1  Procedural information 

Annex 2  Stakeholder consultation 

Annex 3  Who is affected by the initiative and how? 

Annex A  Relevant EU documents concerning unfair trading practices 

Annex B  The “fear factor” and different enforcement approaches to unfair trading practices 

Annex C  Unfair trading practices, agriculture and the agro-food sector: quantitative evidence 

Annex D  Table on transposition of Late Payment Directive in Member States in terms of payment terms 

Annex E  Comparison of policy options 

Annex F  Cafaggi  and  Iamiceli,  Overview  on  “Specific  regulations  on  Unfair  Trading  Practices  in 

Member State in the Business-to-Business Retail Supply Chain”, February 2018 

Annex G  Cafaggi  and  Iamiceli,  Overview  on  “Specific  regulations  on  Unfair  Trading  Practices  in 
Member  State  in  the  Business-to-Business  Retail  Supply  Chain”,  February  2018,  summary 
tables 

Annex H  Chief  Economist  of  DG  Competition,  European  Commission,  Economic  impact  of  unfair 

trading practices regulations in the food supply chain, 22 January 2018 

71 

 
 
 
 
 
 
Annexes - Contents 

Annex 1: Procedural information .................................................................... 74 

1. 

Lead DG, Decide Planning/Commission Work Programme references ........................................ 74 

2.  Organisation and timing ............................................................................................................... 74 

3. 

External expertise and evidence base .......................................................................................... 75 

3.1. 

3.2. 

Joint Research Centre academic workshop on UTPs in the food supply chain ........................ 75 

Study on UTPs at Member State level ...................................................................................... 76 

4. 

Regulatory Scrutiny Board ............................................................................................................ 77 

Annex 2: Stakeholder consultation .................................................................. 82 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

2.6. 

2.7. 

2.8. 

Stakeholder consultation process ................................................................................................ 82 

Summary of stakeholder consultation results .............................................................................. 82 

Inception impact assessment ................................................................................................... 82 

Open public consultation ......................................................................................................... 83 

Targeted questionnaire to undertakings .................................................................................. 86 

Targeted questionnaire to consumer organisations ................................................................ 86 

Questionnaire to Member State public authorities ................................................................. 87 

Joint Research Centre academic workshop on UTPs in the food supply chain ........................ 87 

Ad hoc meetings with food supply chain stakeholders ............................................................ 87 

Civil Society Dialogue groups ................................................................................................... 87 

Annex 3: Who is affected and how? ................................................................ 88 

1. 

2. 

Practical implications of the initiative .......................................................................................... 88 

Summary of costs and benefits .................................................................................................... 91 

Annex 4: Analytical methods ........................................................................... 93 

Annex A: Relevant EU documents concerning unfair trading practices .... 94 

Annex B: The “fear factor” and different enforcement approaches to unfair 
trading practices ................................................................................................ 95 

1. 

2. 

3. 

4. 

Fear factor .................................................................................................................................... 95 

Judicial redress ............................................................................................................................. 95 

Administrative redress .................................................................................................................. 96 

The voluntary Supply Chain Initiative ........................................................................................... 97 

Annex C: UTPs, agriculture and the agri-food sector: quantitative evidence
 ............................................................................................................................. 98 

72 

 
 
 
1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

The food supply chain ................................................................................................................... 98 

Economics of agriculture ............................................................................................................ 101 

Agriculture specifics .................................................................................................................... 102 

Structure of the different stages of the food chain .................................................................... 105 

Price transmission ....................................................................................................................... 109 

Rules on UTPs and price evolution ............................................................................................. 111 

Intra-EU Trade ............................................................................................................................ 113 

Share of cooperative products in retail sales ............................................................................. 121 

Share of agricultural products (in the meaning of the Treaty) in retail sales ............................. 121 

Annex D: Table on transposition of Late Payment Directive in Member 
States in terms of payment terms................................................................... 124 

Annex E: Comparison of policy options ........................................................ 132 

1.  Degree of harmonisation of substantive UTP rules .................................................................... 132 

2. 

3. 

Scope of UTP definition .............................................................................................................. 133 

Coverage of products.................................................................................................................. 134 

4.  Operators covered ...................................................................................................................... 134 

5. 

6. 

7. 

8. 

Enforcement ............................................................................................................................... 135 

Coordination of enforcement ..................................................................................................... 136 

Legal instrument ......................................................................................................................... 137 

Comparison of option packages ................................................................................................. 137 

Annex F: Study - Overview on “Specific regulations on Unfair Trading 
Practices in Member State in the Business-to-Business Retail Supply 
Chain” ............................................................................................................... 140 

Annex G: Study annexes - Overview on “Specific regulations on Unfair 
Trading Practices in Member State in the Business-to-Business Retail 
Supply Chain”  ................................................................................................. 196 

Annex H: Economic impact of unfair trading practices regulations in the 
food supply chain (DG Competition) ............................................................. 260 

73 

 
 
 
Annex 1: Procedural information 

1  Lead DG, Decide Planning/Commission Work Programme references 

The  European  Commission’s  Directorate-General  for  Agriculture  and  Rural  Development 
(DG  AGRI)  is  the  lead  Directorate-General  in  this  initiative.  The  initiative  to  improve  the 
food  supply  chain  is  included  in  Agenda  Planning  (Decide)  under  the  reference 
PLAN/2017/764.  In  addition,  in  the  European  Commission  Work  Programme  for  2018  the 
European Commission committed itself to “propose measures to improve the functioning of 
the food supply chain to help farmers to strengthen their position in the marketplace and help 
protect them from future shocks”300. 

2  Organisation and timing 

The European Commission decided in June 2016 to perform an impact assessment on aspects 
of the functioning of the food supply. DG AGRI is responsible for EU policy on agriculture 
and  rural  development  and  deals  with  all  aspects  of  the  common  agricultural  policy (CAP), 
including the common organisation of the markets in agricultural products (Regulation (EU) 
No. 1308/2013). DG AGRI cooperated on the drafting of the IA with the Secretariat-General 
(SG),  DG  Internal  Market,  Industry,  Entrepreneurship  and  SMEs  (GROW),  DG  Trade 
(TRADE),  DG  Financial  Stability,  Financial  Services  and  Capital  Markets  Union  (DG 
FISMA), DG Competition (COMP), DG Environment (ENV), DG Climate Action (CLIMA), 
DG Maritime Affairs and Fisheries (MARE), DG Health and Food Safety (SANTE), and DG 
Justice  and  Consumers  (JUST).  This  process  included  six  Inter-service  Steering  Group 
meetings,  which  took  place  between  14  July  2017  and  2  March  2018  (the  latter  before 
resubmission to the Regulatory Scrutiny Board). 

The  following  main  steps  were  taken  in  the  lead-up  to  the  submission  of  the  impact 
assessment to the Regulatory Scrutiny Board: 

  a Joint Research Centre workshop with independent academic experts on UTPs in the 

food supply chain (July 2017); 

  an inception impact assessment (July 2017); 
  an open public consultation (August to November 2017); 
 

targeted questionnaires to MSs, undertakings in the food supply chain and to consumer 
organisations (September to December 2017); 

  a series of meetings with stakeholders of all tiers of the food supply chain (year 2017). 

The key results from these steps are summarised here and in Annex 2. 

300 Listed also in 2018 Commission work programme – Annex I: new initiatives, p.3, number 9. 

74 

 
 
 
 
                                                 
3  External expertise and evidence base 

The evidence base of the IA includes information collected through stakeholder consultation, 
as  well  as  a  workshop  and  independent  expert  literature  reviews,  and  information  from 
experiences in regulating UTPs in MSs and in third countries. 

3.1 

Joint Research Centre academic workshop on UTPs in the food supply chain 

Experts at the "Unfair trading practices in the food supply chain" workshop acknowledged the 
existence of UTPs in the food supply chain, as well as the extensive regulatory and analytical 
work around them301. Such practices are in general considered to be more likely to happen in 
situations of imbalance of bargaining power. The food supply chain has, broadly, experienced 
increasing concentration and consolidation. It was however argued by one expert that under 
certain  market  conditions,  increasing  concentration  and  consolidation  may  result  in  more 
efficient  outcomes.  The  negative  consequences  may  take  different  forms  and  may  affect 
different  aspects  of  farm/firm  decision-making  processes.  UTPs  may  distort  the  way  prices 
are negotiated and set, and contribute to increased market uncertainty and increased risk that, 
among  others,  may  lead  to  market  inefficiencies,  lower  investment,  distorted  income 
distribution along the chain, and the exit of some operators (particularly small-scale farmers). 
The workshop highlighted that UTPs may happen at each stage of the food supply chain and 
that their effects  can  be transmitted along the chain towards either downstream or upstream 
sectors. Further, the transnational nature of supply chain systems implies that the impacts of 
UTPs can have cross-border effects, including with third countries.  

While some practices might be perceived as being unfair they are not necessarily inefficient at 
the  food  supply  chain  level.  There  is  a  danger  that  policies  to  limit  UTPs  could  eliminate 
practices that  enhance efficiency  of  transactions  as  an  unintended  effect  and  thereby  reduce 
the  total  surplus  that  can  be  shared  between  participants  to  the  transaction.  In  some  cases 
fairness  can  be  a  relative  concept,  but  in  any  case  the  perception  of  unfairness  can  have  a 
significant  impact  on  costs  (by  impacting  trust  and  increasing  transaction  costs  or  affecting 
socio-economic cohesion) and there are sound economic motives to take redistributive effects 
and the perception of redistribution on board.  

The  workshop  also  highlighted  a  concern  that  UTPs  are  generally  imprecisely  and 
ambiguously defined. Rules to regulate UTPs, or at least the most blatant UTPs, already exist 
at the level of several Member States, but the regulatory landscape in the EU is considerably 
fragmented.  It  is  also  challenging  to  establish  what  should  be  attributed  to  each  specific 
practice  and  how  to  measure  the  effect  due  to  a  lack  of  information,  among  others  because 

301 Joint Research Centre report, Unfair trading practices in the food supply chain, 2017. 

75 

 
 
 
 
 
                                                 
companies involved in UTPs are not willing to reveal it (in the case of those exposed to UTPs 
due  to  the  ‘fear  factor’).  The  probability  of  the  so-called  'forum  shopping'  will  also  add 
complexity  to  this  picture.  Critiques  have  well  substantiated  the  many  distortions  and 
counterproductive  biases  that  can  be  introduced  when  considering  regulations  leading  to  a 
“benign neglect” for efficiency considerations, a significant risk in  policy  making. A lesson 
from these limitations could well be that a superior solution requires mixing different tools.   

There  was  a  general  agreement  in  the  workshop  that  regulatory  authorities  and  other 
monitoring  devices  are  needed  to  enforce  rules  concerning  UTPs,  preventing  their  harmful 
consequences,  following-up  complaints  etc.,  and  that  this  requires  most  of  the  time  such 
devices to be external to the direct players of the game. The Supply Chain Initiative faces the 
reluctance  of  some  key  stakeholders  to  participate,  particularly  because  of  the  lack  of 
adequate  mechanisms  of  enforcement  of  the  rules  agreed  upon.  The  coordination  between 
public and private monitoring systems would allow a more efficient enforcement of the rules. 

The  workshop  also  recognised  several  benefits  of  coordination  (harmonisation)  of  the 
regulatory framework at supranational (EU) level, because of the transnational nature of many 
supply chains, encouraging a more complete common market, where competition takes place 
under  the  same  conditions.  The  supranational  coordination  may  help  prevent  a  ‘race-to-the-
bottom’  in  UTP  regulation  between  countries  and  lead  to  economies  of  scale  in 
administration. Finally, an important benefit of coordination relates to transaction cost savings 
for operators along the supply chain, which would need to spend less on information costs due 
to differences in the regulatory framework between Member States. However, the workshop 
identified  some  costs  linked  with  the  coordination  or  harmonisation  of  the  regulatory 
framework. Member States may need to adopt a different regulatory framework than desired, 
which can lead to over-regulation in certain Member States and to costs of switching from the 
existing system to a new one. The more restrained the harmonisation the less likely an over-
regulation effect is to be significant.  

The  participants  also  noted  the  paucity  of  empirical  evidence  to  date  on  the  occurrence  of 
UTPs  in  general  and  in  particular  within  the  food  supply  chain.  The  limited  knowledge 
accumulated to date on UTPs despite the considerable public interest in the topic suggests the 
imperative  for  additional  research  to  be  conducted  on  the  topic,  even  while  it  is  recognised 
that  measuring  precisely  the  economic  effect  of  such  practices  is  complex  due  to  many 
confounding  factors  and  a  lack  of  data,  in  part  because  of  the  fear  factor.  The  lack  of 
information could be partially solved by increasing transparency within the agro-food supply 
chain. 

3.2 

Study on UTPs at Member State level 

The Commission sent a questionnaire to Member States with a threefold objective: in order to 
update information that was collected from Member States on the basis of a questionnaire sent 
in 2015 on the existence of UTP legislation, implementation and enforcement; to learn about 
impact  assessments  that  Member  State  authorities  may  have  carried  out  before  deciding  on 
national UTP rules or evaluations; and to gather evidence on the administrative costs to public 
administrations from the introduction of rules on UTPs. The Member States replies covering 

76 

 
 
the  first  aspect  were  used  as  data  for  the  Cafaggi  and  Iamiceli  (2018)  study  ‘Overview  on 
“Specific  regulations  on  Unfair  Trading  Practices  in  Member  State  in  the  Business-to-
Business Retail Supply Chain”’.  

As regards the administrative cost aspect 15 Member States provided information: 8 of them 
(Hungary, Latvia, Poland, Slovakia, Bulgaria, United Kingdom, Czech Republic, Spain) have 
legislation  on  UTPs  and  a  functioning  competent  authority,  either  a  specific  one  or  one 
integrated in the competition authority. Overall, Member States have difficulty in estimating 
costs  –  the  methodologies  used  are  diverse  and  unclear  and  sometimes  result  in  widely 
different  results  (e.g.  the  cost  for  setting  up  an  administrative  authority  varies  from  32 
thousand EUR (Slovakia) to 4 million EUR (Sweden), the yearly operational costs can from 
10  thousand  EUR  (Slovakia)  up  to  27  million  EUR  (Sweden).    Looking  at  the  information 
from  United  Kingdom,  Spain  and  Czech  Republic,  with  well  established,  functioning  and 
experienced  specific  competent  authorities,  the  additional  costs  linked  to  an  EU  action, 
including  those  related to reporting and EU coordination, would be absorbed by the  current 
structures and be therefore, in their opinion, negligible. 

4  Regulatory Scrutiny Board 

An upstream meeting with the Regulatory Scrutiny Board took place on 13 November 2017, 
with  DG  AGRI  and  SG  present.  The  aim  of  the  meeting  was  for  DG  AGRI  to  present  the 
initiative  and  the  general  approach  envisaged  for  the  impact  assessment  and  to  obtain 
feedback as to the main issues the Regulatory Scrutiny Board expected the impact assessment 
to address. 

DG AGRI presented the impact assessment to the Regulatory Scrutiny Board on 21 February 
2018. The RSB issued a negative opinion on 23 February 2018. The Board requested further 
work to be done and asked for the resubmission of the impact assessment report. The Board 
identified several shortcomings that needed to be addressed in a revised version. 

A revised version of the impact assessment report was submitted to the Regulatory Scrutiny 
Board on 5 March 2018 and the Board's issued a second opinion, received on 12 March 2018, 
of positive with reservations. 

The  following  table  provides  an  overview  of  the  adjustments  made  to  the  text  to  meet  the 
requirements of the Board’s first opinion: 

RSB 

Changes: location in revised IA & comments 

1. 

Report  does  not  explain  the  reasons  for 
changing  the  course  of  action  following 
the 2016 Commission Report. The report 
initiative 
does  not  explain  how 
complements 
the 
shortcomings  of  actions  taken  so  far  at 

the 
corrects 

or 

Sections  3.3  and  3.2  were  developed,  with  a 
the  January  2016  baseline  and 
discussion  of 
developments  since 
then  and  conclusions  are 
presented  in  detail.  Clarification  was  made  that  the 
recommendations  put  forward  at  the  time  were  not 
fully  implemented,  which  in  part  justifies  the  need 

77 

 
 
 
the EU level.  

for EU action.  

Report  does  not  state  the  consensus  on 
the occurrence of unfair trading practices 
in the food supply chain. 

Changes  to  section  2.3  –  the  section  was  shortened 
and the consensus is now stated clearly upfront (and 
backed up by documentation). 

2. 

Use of CAP legal bases is not sufficiently 
motivated 

3. 

Report  does  not  assess  the  effectiveness 
of  national  legislation  on  UTPs  in  the 
FSC 

It  does  not  explain  why  it  is  more 
effective to act at the EU level. 

Section 3.1 (legal basis) has been further developed, 
including  comments  on  the  effects  on  farmers  from 
UTPs  occurring  downstream 
chain. 
Clarification  is  given  on  the  rationale  for  the 
restricted scope of possible options (preferred option 
– see choice later in  document)  and the reasoning is 
adjusted in this sense. 

the 

in 

Sections  7  and  8  (and  Annex  E)  discuss  option 
packages  and  the  preferred  option.  The  preferred 
approach  has  been  changed  to  tackle  UTPs  as  they 
occur in relationships characterised by imbalances in 
for  such 
(using  SMEs  as  proxy 
the  chain 
imbalances), addressing proportionality issues. 

Section 6.2.1.1 - only limited evidence is available on 
this  issue,  but  the  evidence  that  does  exist  is  put  to 
better use. Where systems such as the UK Groceries 
Code  Adjudicator 
plus 
enforcement)  exist  the  experience  is  positive  and 
improving over time. The history of the GCA shows 
the evolution from voluntary code to mandatory rules 
that include effective enforcement powers. 

(practicable 

rules 

Section  2.7  –  the  discussion  on  the  SCI  (part  of 
baseline),  its  benefits  and  shortcomings  and  relation 
to EU need to act, has been moved from Annex B of 
report.  

Sections  3.2,  3.3  and  6.1  –  a  clearer  and  more 
detailed  presentation  is  offered  of  the  expected 
benefits  against  the  baseline  of  under-protection 
against UTPs and the divergence of rules in Member 
States.  

It  was  clarified  in  various  places  that  EU  measures 
would  not  replace  but  rather  complement  existing 
rules  (addressing  subsidiarity  issues  and  seeking 

78 

 
 
 
 
 
 
4. 

Options are not detailed enough 

synergies). 

Section  6.4  -  one  option  package  has  been  added 
offering  further  detail.  Some  additions  in  section  5 
were also included when discussing the options. 

The  analysis  of  impacts  does  not  cover 
farmers'  revenues,  innovations  in  the 
FSC,  competition 
in  various  market 
segments  and  implications  for  Member 
States. 

Section  6.2.1.2  on  farmers  –  evidence  that  UTPs 
harm  farmers  has  been  further  highlighted.  Surveys 
and  the  agreement  around  the  issue  in  the  voluntary 
SCI demonstrate harm to operators. 

innovation 

Section  6.2.1.4  on  innovation  -  evidence  on  impact 
inconclusive.  Still, 
on 
negative  impacts  are  more  likely  where  there  is  low 
competition  in  markets  downstream  of  agricultural 
production.  

is  somewhat 

that  margins  are 

Section 6.3.3 on competition –an approach that does 
not apply to relationships between larger operators is 
considered.  Such  an  approach  would  address 
the 
concerns 
introduction  of  EU  rules  on  UTPs  when  large 
operators  are  concerned  (i.e.,  without  the  significant 
imbalance of bargaining power that enables UTPs in 
first  place).  See  also  Section  6.2.1.3  at  the  start, 
Annex E.2 and E.8. 

skewed  due 

5. 

Section  6.2.3  on  Member  States  is  also  developed 
further. 

Proportionality of the preferred option, in 
particular  with  respect  to  the  need  to 
chain, 
cover 
independently  of 
the  asymmetry  of 
bargaining power is not fully tested 

the  whole 

supply 

in 

some 

The  complementary  character  of  the  initiative  is 
mentioned 
(minimum 
harmonisation).  It  is  made  clear  that  it  is  not  the 
ambition  to  replace  voluntary  schemes  or  national 
rules, but rather to introduce minimum protection and 
possibly re-inforce it (e.g. section 1.1). 

passages 

Sections  7  and  8  –  the  preferred  option  is  changed 
from  comprehensive  coverage  in  terms  of  operators 
to protection of SME operators in the chain (see also 
6.2.1.2  at  the  end).  It  is  explained  that  the  negative 
effects  of  UTPs  are  passed  on  through  the  food 
supply  chain 
to  farmers,  even  if  UTPs  occur 
downstream  of  primary  production.  As  such,  it  is 
necessary to cover UTPs in the chain. This element is 
also  part  of  previous  European  Commission 

79 

 
 
 
 
documents. 

Section  3.2  relates  EU  action 
to  (i)  problem 
definition  and  objectives,  (ii)  complementarity,  (ii) 
existing rules, (iii) contractual arrangements between 
parties.  (5.3.3;  6.3.1).  Coverage  of  operators  is 
discussed in section 6.3.3 and informs choices made 
later on in text (sections 6.4, 7 and 8, and Annex E): 
coverage of operators and choice of legal instrument 
(directive instead of regulation).  

Section  6.2.1  and  Annex  3  –  the  section  and  the 
Annex  clarify  that  the  precise  quantification  of 
benefits is not feasible  (the UK was also not able to 
quantify  benefits  in  case  of  the  UK  Groceries  Code 
Adjudicator).  But  some  calculations  are  provided 
which  enable  a  broad  idea  of  the  magnitude  of 
benefits.  Clearer  ranges  for  costs  estimates  drawn 
from MS experiences are introduced. 

6. 

Quantification  of  the  various  costs  and 
benefits associated to the preferred option 
of this initiative is missing 

The  following  table  provides  an  overview  of  the  adjustments  made  to  the  text  to  meet  the 
requirements of the Board’s second opinion: 

RSB 

Changes: location in revised IA & comments 

1. 

The  report  should  justify  why  the  2016 
Commission’s  conclusions  are  no  longer 
valid. The report should explain why the 
European  Parliament,  the  Council  and 
others have requested further actions. The 
revised  report  should  present  additional 
evidence to support the need for action at 
EU level. 

2. 

In  section  3.3  of  the  IA  it  is  now  better  explained 
that,  unlike  expected,  after  2016  there  were  only 
limited  positive  developments  regarding  UTPs, 
because  both  Member  States  and  the  Supply  Chain 
Initiative 
the  Commission’s 
recommendations  only  to  a  limited  extent,  i.e. 
material  improvements  did  not  materialise.  This 
discrepancy  between  expectations  and  the  (lack  of) 
actual development has also been illustrated in a new 
table.  

followed  up  on 

The  scope  of  the  impact  assessment  is 
now  more  proportionate,  covering  only 
those  parts  of  the  food  supply  chain 
where  asymmetries  in  bargaining  power 
could  result  in  unfair  trading  practices. 
the 
The  report  should  explain  how 

The  last  subparagraph  of  section  5.5.2  has  been 
reworded  and  complemented  on 
the  concrete 
implementation of the SME proxy. In section 8, this 
aspect  is  also  clarified  in  the  last  subparagraph 
describing the preferred option package. 

80 

 
 
 
 
 
 
 
be  made 
preferred  option  would 
operational. This includes how the proxy 
for  SME  size  will  be  implemented  to 
better  protect  weaker  operators  in  the 
FSC. 

It also includes the concrete definition of 
unfairness  criteria  to  be  used  for  the  six 
practices which the legislation will cover 

A  new  section  5.3.3.7  has  been  added  for  this 
purpose.  In  section  8,  this  aspect  is  also  clarified  in 
the last subparagraph describing the preferred option 
package. 

3. 

It 

schemes. 

The  report  does  not  provide  specific 
the  effectiveness  of 
information  on 
particular  national 
is 
therefore  unclear  what  the  initiative  will 
add.  Without  an  analysis  of 
the 
effectiveness  of  national  schemes,  the 
report  may  overestimate  the  benefits  of 
the proposed measures. Enforcement may 
only  change  national  practice  in  those 
Member States where no UTP regulations 
or voluntary schemes exist 

4. 

The  report  should  comment  on  costs  of 
implementation,  especially  for  setting  up 
and  operating  the  network  of  competent 
authorities 

The  table  on  benefits  should  be  adjusted 
to  reflect  the  estimates  and  qualitative 
assessment provided in the main report. 

In  section  6.2.3  of  the  impact  assessment  report  the 
benefits of UTP measures have now been detailed in 
a  table  that  clearly  differentiates  the  benefits  by  the 
practices that are already existing in Member States, 
thus  illustrating  which  benefit  will  accrue  to  how 
many  (and  which)  Member  States.  The  table  also 
includes  a  tentative  assessment  of  the  potential 
impact of the listed benefits  –the largest benefit will 
accrue  to  those  Member  States  where  no  UTP 
schemes  exist,  but,  for  instance,  better  coordination 
across Member States will provide (smaller) benefits 
to all. The list of benefits itself is based on the study 
by Cafaggi and Iamiceli that is included in Annex F.  

Sections  6.2.3  and  6.3.5  (and  Annex  3)  were 
developed  to  present  further  details  of  the  expected 
costs  of  implementation  to  public  administrations  in 
respect  to  their  existing  legal  frameworks  on  UTPs 
and to expand on the costs expected to be incurred by 
the same administrations in respect to participating in 
the  network  of  competent  authorities,  as  well  as  on 
costs of organising the network for the EU. The table 
on costs in Annex 3 was updated accordingly. 

Annex 3's table on benefits was updated to reflect the 
figures on the magnitude of possible benefits and the 
qualitative  benefits  pertaining  to  increased  trust 
between  operators  (discussed  in  section  6  of  the 
report). 

81 

 
 
 
 
 
 
 
 
Annex 2: Stakeholder consultation 

1  Stakeholder consultation process 

The stakeholder consultation process was set out in a consultation strategy302 and carried out between 
17 July and 6 December 2017.   

Stakeholders  were  invited  to  offer  comments  and  evidence  on  problem  definition,  policy  objectives, 
the  need  for  EU  action,  policy  options,  on  the  likely  impact  of  the  policy  options,  and  on 
implementation issues, including monitoring and enforcement. The stakeholder consultation meets the 
requirements in the better regulation guidelines. 

2  Summary of stakeholder consultation results 

2.1 

Inception impact assessment 

The  inception  impact  assessment  received  significant  attention,  with  66  contributions  submitted  by 
various  stakeholders303.  33%  of  these  were  farmers  or  farming  organisations,  17%  Member  State 
authorities, 15% non-governmental organisations (NGOs), 11% processors and their organisations, 8% 
retailers  and  their  organisations,  and  17%  other  respondents  (academia,  trade  unions,  traders,  and 
anonymous).  It  should  be  noted  that  the  inception  impact  assessment  feedback  process  is  not 
structured in the sense of a questionnaire. Instead the text of the contributions was sifted for relevant 
information in a systematic way ex post. 

91% of respondents agreed that UTPs exist in the food supply chain (5% did not reply, and 5% did not 
state  a  clear  position).  76%  of  respondents  stated  that  UTPs  caused  a  significant  problem,  and  14% 
that they did not304. 5% of respondents stated that UTPs existed but an overall positive effect on the 
food supply chain in terms of efficiency. 

71%  of  respondents  believed  there  was  a  need  for  the  EU  to  act  (from  64%  of  ‘other’  to  90%  of 
NGOs;  farmers  82%,  Member  States  73%,  processors  71%),  except  for  retailers  (100%  of  retailers 
believed the EU should not act). 

Only 5% of respondents commented on the inclusion or exclusion of food products in the scope of the 
initiative, being broadly in favour of inclusion. 41% commented  on the extent to which food supply 
chain operators should be included, with 82% in favour of covering the full supply chain (the outlier 
being the processing sector, where only 57% of respondents were in favour of covering the full supply 
chain). 

20%  of  respondents  mentioned  the  fear  factor,  generally  considering  this  effect  to  exist  and  to  be 
significant. 62% believed the possibility of making anonymous complaints should exist, 38% believed 
it should not). 92%  believed sanctions against those practicing UTPs should exist, 8% believed they 
should not). 17% of respondents mentioned cooperation between Member State authorities, with most 
being supportive of cooperation. 

302 European Commission, Consultation Strategy – Initiative to improve the food supply chain, 2017 
303 Individual contributions are listed in the inception impact assessment webpage. 
304 In the remaining of the inception impact assessment subsection the percentages for ‘no response’ or ‘unclear position’ are omitted. 

82 

 
 
                                                 
2.2 

Open public consultation305 

Overview of respondents 

The  open  public  consultation  (OPC)  results  were  consistent  with  those  of  the  IIA.  The  OPC  ran  for 
three months, between 25 August and 17 November, and attracted a total of 1,432 responses(56%  by 
individuals  -  803  responses  -  and  44%  by  organisations  -  628  responses).  71%  of  individuals  stated 
they  were  involved  in  farming  (570  responses),  and  29%  that  they  were  not  (233  responses). 
Organisations’  contributions  were  mainly  by  private  companies  (38%  of  organisations’  responses), 
business  and  professional  associations  (31%),  and  NGOs  (20%).  In  terms  of  sector  of  activity,  the 
organisation responses were from agricultural producers (53% of organisations’ responses); the agro-
food  sector  (22%);  the  trade  sector  (7%);  civil  society  organisations  (7%);  the  retail  sector  (4%); 
research organisations (1%); and ‘other’ ( 6%). 

The ‘private company’ group can be further broken down by company size, (number of employees). 
Small  and  medium  enterprises  (SMEs)  were  81%  of  private  company  responses).  Large  enterprises 
(those with more than 250 employees) were 19% of all private company contributions. 

In  terms  of  Member  State  of  origin  the  highest  participation  came  from  Germany  (29%  of  total), 
Austria  (14%),  France  and  Spain  (7%).  The  lowest  from  Croatia,  Luxembourg,  and  Cyprus  (1 
contribution each). 

Respondents’ views 

a)  Problem definition306 

 90% of respondents agreed or partially agreed that there were practices in the food supply chain that 
could be considered to be UTPs. These results were broadly similar for all stakeholder groups, with 
the  exception  of  the  retail  sector  (12%  agreed  or  partially  agreed  UTPs  existed  in  the  food  supply 
chain, and 88% disagreed or partially disagreed – most of these partially disagreed, at 72%).  

The  respondents  were  then  asked  whether  a  list  of  practices  could  be  considered  to  be  UTPs,  with 
respondents agreeing or partially agreeing at between 80% (payment periods longer than 30 days for 
agro-food  products  in  general)  and  93%  (unilateral  and  retroactive  changes  to  contracts)  that  the 
practices were UTPs. When asked about how frequently UTPs occurred in the food supply chain 87% 
stated they occurred regularly or very regularly. All respondents agreed that they occurred regularly or 
very  regularly  except  for  the  retail  sector,  which  stated  these  never  or  rarely  occurred  (84).  88%  of 
individuals stated UTPs occurred regularly or very regularly. 

The respondents were asked to identify which 3 practices they considered to be UTPs and to have the 
most serious impact. Of the top 8 practices identified, six were listed as Supply Chain Initiative (SCI) 
Principles of Good Practice and seven as UTPs in the Agricultural Markets Task Force (AMTF) report 
(‘payment  periods  longer  than  30  days’  appearing  twice,  for  perishable  and  agro-food  products  in 
general). 

305 Where figures do not add up to 100% this is due to the omission of those stating ‘no opinion’. There was dependency between some 
questions (only some respondents will have seen some questions, as these were only relevant depending on an answer previously given). This is 
relevant in particular for the retail sector, which meant for several questions the retail response rate is very low (3 or 4 responses over 25 retail 
organisations). Replies were not compulsory, and some respondents chose not to reply to some questions. 
306 Percentages based on number of respondents answering each question. 

83 

 
 
                                                 
 
Frequency 

SCI's 
Principles 
of Good 
Practice 

AMTF-
listed 
UTPs 

Unilateral  and  retroactive  changes  to  contracts  (concerning 
volumes, quality standards, prices) 

Last minute order cancellations concerning perishable products 

Payment periods longer than 30 days for perishable products 
Payment periods longer than 30 days for agro-food products in 
general 
Imposing contributions to promotional or marketing costs 

Unilateral  termination  of  a  commercial  relationship  without 
objectively justified reasons 
Requests  for  upfront  payments  to  secure  or  retain  contracts 
("hello money") 

Imposing claims for wasted or unsold products 

Imposing  private  standards  relating  to  food  safety,  hygiene, 
food  labelling  and/or  marketing  standards,  including  strict 
verification procedures 
Imposing  an  upfront  access  fee  for  selling  a  product  ("listing 
fees") 
Programmed overproduction leading to food waste 
Withholding  by  one  party  of  essential  information  to  both 
parties 
Passing onto other parties of confidential information received 
from partner 
Additional  payment  to  have  products  displayed  favourably  on 
shelves ("shelf-space pricing") 
Imposing  on  a  contract  party  the  purchase  of  an  unrelated 
product ("tying") 
Inconsistent application of marketing standards leading to food 
waste 
Imposing to suppliers costs related to product shrinkage or theft 

Imposing a minimum remaining shelf life of goods at the time 
of purchase 
Other 

771 

316 

275 

273 

248 

227 

185 

182 

179 

152 

146 

114 

98 

90 

78 

60 

40 

11 

83 

* 

* 
* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

* 

The questionnaire requested respondents to identify the actors in the food supply chain on which UTPs 
might  have  appreciable  negative  effects.  94%  of  respondents  agreed  or  partially  agreed  that  such 
appreciably negative effects occurred for farmers. 83% of respondents for processors; 66% for SMEs; 
60% for consumers; 55% for third country operators producing for the EU market; 39% for traders; 
and  35%  for  retailers.  Respondents  were  also  asked  whether  they  agreed  that  UTPs  could  have 
negative indirect effects on these groups, with broadly similar results. 

84 

 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
b)  Need to act 

When  asked  whether  action  should  be  taken  to  address  UTPs  in  the  food  supply  chain  95%  of 
respondents agreed or partially agreed. If they thought action should be taken, respondents were then 
asked to specify who should take such action.  

- 87% believed action should be taken by the European Union (in combination with Member States, 
58% ; or the EU acting alone, 29%);  

- 8% that MSs should act alone; and  

- 4% that action should be taken through voluntary initiatives (54% of these were retail organisations). 

Of the 87% of respondents that believed that the EU should take action, 51% thought legislation was 
the appropriate means, 46% a mix of legislation and non-legislation, and 2% preferred non-legislative 
action.97% of these respondents believed EU action would result in better enforcement of rules; 95% 
believed  EU  action  would  provide  more  legal  certainty  for  businesses;  94%  that  it  would  level  the 
playing  field  in  the  internal  market;  84%  that  it  would  benefit  EU  cross-border  transactions;  84% 
believed it would reduce food waste; 80% that it would lead to a higher degree of innovation; and 75% 
that it would widen the choice offered to consumers. 67% preferred both a harmonised definition and a 
list of specific UTPs; 21% a list of specific UTPs; 11% general principles; and 1% none of these. 

Finally respondents were asked for their views on whether the voluntary Supply Chain Initiative was 
sufficient to address UTPs. 75% disagreed or partially disagreed, and 22% agreed or partially agreed. 
All organisation types primarily disagreed or partially disagreed, except for retail organisations( 88% 
agreed  or  partially  agreed  Supply  Chain  Initiative  was  sufficient.  Agro-food  and  trade  organisations 
had relatively high rates for ‘agreed or partially agree’, even if this was not overall the preferred option 
(43%  and  40%,  respectively).  81%  of  individuals  involved  in  farming  and  69%  of  other  individuals 
disagreed or partially disagreed. 

c)  Enforcement 

92% of respondents agreed or partially agreed that there should be minimum standards applying to the 
enforcement of UTP rules in the EU. Support for minimum enforcement standards ranged from 20% 
of retail organisations to 100% for civil society organisations (96% of agriculture organisations; 87% 
of agro-food organisations agreed or partially agreed). 

Respondents were then asked which elements they considered to form an important part of an effective 
public  enforcement  of  UTP  rules.  94%  stated  transparency  of  investigations  and  results;  93%  the 
possibility  of  fines  in  the  case  of  violations  to  the  rules;  92%  the  possibility  to  file  collective 
complaints; 89% the ability to receive and to treat confidential complaints; 89% the designation of a 
competent authority; 73% the ability to conduct own initiative investigations; and 36% other aspects. 
The various organisation types and individual respondents mostly agreed or partially agreed with these 
elements,  with  the  exception  of  retail  (disagreed  or  partially  disagreed  with  each  of  the  elements 
between 72% to 80%). 

85 

 
 
2.3 

Targeted questionnaire to undertakings 

The  targeted  questionnaire  to  undertakings  was  open  between  6  November  and  10  December  and  a 
total  of  122  responses  were  received.  35%  of  respondents  were  involved  in  agriculture,  48%  in 
processing, 10% in retail, 4% in wholesale (remaining answers not classified). In terms of size, 70% of 
respondents were SMEs. 7% of the respondents classified themselves as buyers, 49% suppliers, 40% 
as acting as both supplier and buyer. A high share of replies is from Belgium, France, Italy, Spain and 
the United Kingdom (18 Member States have 3 or less replies). 

54% of the enterprises acting as buyers and 89% of suppliers state that late payments occur in business 
transactions.  14%  to  30%  of  those  acting  as  buyers  stated  that  they  have  imposed  other  UTPs  in  a 
business transaction. For enterprises acting as suppliers 44% to 82% stated that they have been subject 
to an UTP as defined above.   

30%  of  the  enterprises  acting  as  suppliers  have  been  refused  a  contract  in  writing  upon  request. 
Suppliers were asked to estimate if they have been a victim to a UTP when buyers were established in 
other Member State. 24% of the respondents stated that they were "often or in a significant number of 
cases"  in  such  situations.  19%  of  suppliers  stated  that  dealing  with  a  foreign  buyer  had  a  negative 
effect on their ability to challenge UTPs. 

60% of the suppliers stated that UTP costs are more than 0.5% of the annual turnover of their business 
operation. Under certain assumptions in terms of weight for each category of answer307, the weighted 
commercial significance of costs related to UTP can be estimated at 1.8% (taking into account the 94 
answers of suppliers) to 1.5% (trimming  out the extreme  answers  – no costs, cost over 5%) of their 
turnover. 44% of buyers considered compliance costs as "high or moderate". 

2.4 

Targeted questionnaire to consumer organisations 

The consultation of consumer organisations resulted in three contributions. This consultation focused 
on whether and how UTPs in the food supply chain would affect consumers, according to their 
representative organisations.  

Respondents disagreed that the introduction of legislation on UTPs would raise consumer prices and 
agreed that it would lead to an increase of trust in the food supply chain and benefit investment. Two 
agreed  that  the  conditions  for  those  employed  in  the  food  supply  chain  would  be  improved  (one  no 
opinion). All respondents agreed that the introduction of EU rules on UTPs would benefit consumers 
in the long term. Two agreed and one partially disagreed there would be benefits in the short term.  

One  respondent  agreed  that  the  introduction  of  UTP  rules  in  their  own  country  had  increased 
consumer  choice,  increased  trust,  improved  conditions  for  investment  for  operators,  improved 
conditions for those employed in the food supply chain, and disagreed that it raised consumer prices 
(the  other  two  respondents  had  no  opinion).  Two  respondents  disagreed  and  one  partially  disagreed 
that self-regulatory initiatives are sufficient. Two respondents disagreed and one agreed that possible 
negative effects on consumers from UTP legislation outweigh the potential benefits (at EU level). 

307 Reference points set: ‘over 5%’ (14 answers) = 5%; ‘2 to 5%’ (18 answers) = 3.5%; ‘0.5 to 2%’ (22 answers) = 1.25%; ‘>0.5%’ (24 answers) 
= 0.25%; ‘nil or insignificant’ (16 answers) = 0%. 

86 

 
 
                                                 
 
2.5 

Questionnaire to Member State public authorities 

Member  State  authorities were  consulted  via  a  set of  questionnaires  that  requested  contributions on: 
actual  and/or  estimated  administrative  costs  of  enforcing  new  UTP  legislation  under  certain 
conditions;  an  update  of  information  previously  provided  (2015)  on  the  status  of  UTP  rules  in  their 
national jurisdictions, including enforcement aspects; and to obtain information on impact assessments 
and other studies that Member States had available in this area. These data were used to inform a study 
by  external  experts  and  directly  in  the  present  impact  assessment  report  (see  Annex  1).  The 
questionnaire to Member States was officially open between 2 October 2017 and 3 November 2017, 
but late submissions were accepted for use in the study by the external experts. 

2.6 

Joint Research Centre academic workshop on UTPs in the food supply chain 

A workshop jointly organised by the Directorate-General for Agriculture and Rural Development and 
the  Joint  Research  Centre  (JRC)  was  held  in  Brussels  on  17-18  July  2017.  The  workshop  brought 
together international experts, with a view to discuss the scientific literature on methodology, impacts 
and  regulatory  aspects  of  UTPs.  A  report  compiled  by  several  experts  and  edited  by  the  JRC  is 
publically available (further details of the outcomes of the workshop in Annex 1)308. 

2.7 

Ad hoc meetings with food supply chain stakeholders 

Several bilateral meetings with stakeholders were organised at their request. Meetings were held with 
Independent Retail Europe, FoodDrinkEurope, EuroCommerce, European Brands Association (AIM), 
the  Danish  Chamber  of  Commerce,  the  German  Retail  Federation,  the  Liaison  Centre  for  the  Meat 
Processing Industry in the European Union (CLITRAVI), the European Livestock and Meat Trading 
Union (UECBV), Edeka, REWE, Federation du Commerce et de la Distribution, the European Dairy 
Association,  the  International  Dairy  Federation,  the  United  Kingdom’s  National  Federation  of  Meat 
and  Food  Traders,  Europatat,  and  Euro  Fresh  Foods.  The  bilateral  meetings  focused  on  answering 
stakeholder  questions  about  the  impact  assessment  process  and  content,  for  stakeholders  to  express 
support for or opposition to the initiative and raise issues of relevance to their sector. 

2.8 

Civil Society Dialogue groups 

Two presentations with an exchange of views were made at Common Agricultural Policy Civil 
Dialogue Groups (CDGs), where several stakeholder groups are represented309. These took place on 6 
November 2017 (Olives CDG) and 22 November 2017 (Horticulture/Fruit and Vegetables CDG). 

308  Joint Research Centre report, Unfair trading practices in the food supply chain, 2017. 
309  Common Agricultural Policy Civil Dialogue Groups. 

87 

 
 
 
 
 
                                                 
Annex 3: Who is affected and how? 

1  Practical implications of the initiative 

This  annex sets  out  the practical  consequences of  the  options  for  operators in  the  food  supply 
chain, public administrations, and consumers. The options were considered under the following 
headings  (see  section  5):  the  scope  of  unfair  trading  practices’  (UTPs)  rules,  the  enforcement 
modalities  including  coordination,  and  the  legal  instrument  to  be  used.  Some  of  the  relevant 
effects  would  be  one-off  costs  (adjusting  to  legislative  changes),  and  others  ongoing  costs 
(additional annual training costs, additional running costs of competent authorities; see section 
6). 

2  Effect on food supply chain operators 

A  prohibition  of  a  minimum  set  of  clearly  damaging  UTPs  would  have  a  positive  economic 
impact on operators in that it would deter such UTPs being applied in their respect. If such UTPs 
occurred nonetheless, the respective prohibition would provide operators with a platform on the 
basis  of  which  to  seek  redress  by  way  of  public  (administrative)  enforcement.  The  operators 
concerned would be able to concentrate on competing on the merits and their economic viability 
could be expected to be not (or less) affected by UTPs. 

The  possible  negative  economic  impact  of  a  short  list  of  specific  prohibited  UTPs  for  certain 
operators would be circumscribed. Concretely  formulated prohibitions targeting specific UTPs 
would  aim  to  limit  legal  uncertainty  for  commercial  transactions.  If  the  principles  of  good 
practice established by the SCI was taken as inspiration for such a ‘black list’, the difference for 
Supply  Chain  Initiative  (SCI)  participants  with  the  current  situation  would  mainly  reside  in 
rendering  the  relevant  UTPs  enforceable;  the  public  enforcement  would  complement  the 
voluntary dispute resolution mechanism foreseen by the SCI.  

UTP rules would result in compliance costs by operators subject to them. According to a 2016 
study, the aspects which were deemed by survey respondents (and especially by SCI members) 
to contribute most to the overall effectiveness of the initiative in tackling UTPs were the training 
of company staff on the principles of good practice and the appointment of contact person(s) for 
internal dispute resolution.310 

The answers to targeted questionnaires sent to undertakings do not allow firm conclusions as to 
the significance of these costs. Any such cost would be incurred according to the specific UTPs 
that  would  be  covered.  It  has  to  be  taken  into  account  that  compliance  costs  in  respect  of  the 
voluntary principles of good practice established under the SCI have already been incurred by its 
signatories  who  have  organised  training.311  A  leading  supermarket  chain  replying  to  the 
consultation, for example, has spent EUR 200 thousand on one-off training measures of staff in 
relation  to  the  SCI  principles  of  good  practice.  Judging  by  the  results,  there  seems  to  be  a 

310 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, p. 226. 
311 See European Commission Communication, Tackling unfair trading practises in the business-to-business food 
supply chain, 15 July 2014, p 13. 

88 

 
 
 
                                                 
general view that compliance costs are not of great significance or a major concern for the vast 
majority of business stakeholders participating in the surveys. 

In relation to a comprehensive coverage of operators, retailers have expressed concerns relating 
to the protection of large manufacturers under such an approach and the ensuing possible impact 
on  the  customary  distribution  of  margins  between  retailers  and  these  large  manufacturers.  
Retailers state they distinguish between these relationships and the ones they have with farmers 
and small producers of food products.  

Under the restricted approach adopted, a retailer’s relationship with a large manufacturer of food 
products would not be constrained by UTP rules. An approach which provides protection from 
UTPs  for  only  smaller  operators  in  the  food  supply  chain  would  also  be  congruent  with  the 
problem  driver  “imbalance  of  bargaining  power”.  A  case-by-case  approach  ascertaining  the 
existence  of  an  imbalance  would  enable  targeting.  It  would,  however,  be  less  predictable  for 
operators  than  an  approach  which  relates  its  protective  effect  to  the  size  of  an  operator  as 
measured by a proxy, such as for example his SME status. 

Effects on small and medium enterprises 

A  coverage  of  operators  that  also  created  obligations  for  SMEs  could  lead  these  smaller 
operators  to  incur  in  compliance  costs.  Although  they  would  not  normally  be  in  a  position  to 
resort to  UTPs  due  to  their lack of bargaining  power  this  could  exceptionally  be different, for 
instance  when  they  are  in  a  position  to  sell  "must-carry"  products.  Yet,  smaller  operators 
including  farmers  generally  welcome  UTP  rules  at  the  EU  level  (98%  of  micro  and  small 
enterprises that responded to the open public consultation believe that action should be taken at 
EU level to address UTPs, either through legislation only or through a mix of legislation with 
non-legislative approaches) and have also participated in agreeing the SCI´s principles of good 
practice  which  applies  regardless  of  size  or  bargaining  power  of  operators  in  the  chain. 
Therefore, it is safe to assume that compliance costs are outweighed by the benefits small and 
medium enterprise operators would enjoy if afforded minimum protection against UTPs in the 
EU.  

Under a restricted approach where protection is offered to SME operators only, care should be 
had  that  the  protection  does  not  come  to  constitute  a  competitive  disadvantage  for  small 
suppliers as their counter-parties would shift – in the interest of their ability to continue to apply 
UTPs - their trading activities to operators which do not enjoy such protection. The risk of such 
an unintended consequence may however be partially mitigated by the fact that it is be harder to 
use  UTPs against  parties which have  a significant  size  and bargaining power; shifting  trade is 
therefore less likely to constitute a recipe to keep the benefits from applying UTPs. At any rate, 
monitoring modalities could control for such effects. 

Effect on public administrations 

An EU common minimum standard in the form of a short list of prohibited UTPs would apply in 
Member States. For some Member States this would not necessitate significant changes to their 
UTP  regimes  as  they  do  already  apply  national  rules  that  outlaw  these  UTPs,  either  via  the 
application of a general prohibition or in the form of prohibited specific UTPs. For the majority 
of  Member  States  who  have  UTP  rules  this  would  therefore  not  entail  significant  additional 
costs. 

For  Member  States  who  do  not  have  UTP  rules,  EU  measures  would  require  adaptation,  in 
particular  with  a  view  to  enforcement.  The  main  cost  would  stem  from  the  need  to  dedicate 

89 

 
 
resources to enforcement. The designation of a competent authority in Member States would be 
a  first  necessary  step  under  a  minimum  requirement  approach  at  EU  level  that  relies  on 
enforcement by Member States.312 Member States which have no competent authority should be 
given appropriate time to designate one and enable it. As there would be no formal requirement 
other  than  being  vested  with  the  minimum  functionally  defined  enforcement  powers,  Member 
States  can  rely  on  existing  structures  and  designate,  for  example,  an  existing  national 
competition authority or a consumer protection authority.313 Member States with experience in 
UTP  enforcement  note  that  significant  saving  of  administrative  costs  can  be  achieved  by 
concentration and utilisation of sources that already exist (e.g. a competent authority for dealing 
with unfair trading practices as part of the national competition authority).314 

Certain Member States’ current UTP rules and enforcement arrangements may be such that the 
introduction of EU framework legislation would not require them to make (significant) changes. 
For others it would be necessary to make changes, including Member States that would have to 
designate a competent authority or additionally entrust an existing authority, such as a national 
competition authority, with an extended mandate covering the enforcement of the UTP rules. 

In a targeted questionnaire Member States were asked to provide estimates on the possible set 
up  and  yearly  operational  costs  of  national  bodies  dealing  with  the  implementation  and 
enforcement of UTP related legislation  and estimates  on possible additional costs linked to an 
EU  action  on  UTPs,  including  costs  on  reporting  and  coordination.  Limited  data  has  been 
presented that would allow an estimate of the likely aggregated costs at EU level.  

It  is  difficult  for  Member  States  to  provide  estimates  and  isolate  the  costs  for  the  specific 
activities  related  to  implementation  and  enforcing  of  UTP  measures.  Most  of  the  difficulties 
relate  to  the  determination  of  the  costs  of  drafting  and  adopting  national  legislation.  From  the 
information  provided  by  Member  States  which  have  existing  UTP  legislation  and  competent 
authorities315,  the  set-up  costs  vary  between  32  thousand  EUR316  up  to  3  million  EUR317,  the 
operational  yearly  costs  vary  from  10  thousand  EUR318  up  to  2.9  million  EUR319.  The 
differences relate to the size of the country - and therefore the national market - and the level of 
ambition of their current UTP legislation. 

Focusing on the  information from three Member States  with well established, functioning and 
experienced  competent  authorities  the  additional  costs  linked  to  EU  action,  including  the 
activities related to reporting and EU coordination, would be absorbed by the current structures 

312 See British Institute of International and Comparative Law, Fair Relations in the Food Supply Chain - 
Establishing Effective European Enforcement Structures, paper of 2014, in favour of enforcement in Member 
States. 
313 See Annex F, Cafaggi and Iamiceli, Overview on “Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain”, 2018, p. 16. 
314 E.g. Czech Republic in replying to a targeted questionnaire sent by the European Commission to Member 
States. 
315 Hungary, Latvia, Poland, Slovakia, Bulgaria, United Kingdom, Czech Republic, and Spain. 
316 Latvia. 
317 Spain. 
318 Latvia. 
319 Spain. 

90 

 
 
                                                 
and, therefore, according to their estimate, be negligible. 320 

The UK Grocery Code Adjudicator 

Example  data  on  actual  costs  (not  estimated)  are  available  from  the  UK  Grocery  Code  Adjudicator 
(GCA).  Expenditure  was  GBP  1,785,741  in  the  2015/2016  financial  year,  and  GBP  622,024  in  the 
2016/2017 financial year. Most of the difference is due to a large-scale investigation into one retailer in 
2015/2016. In the 2016/2017 financial year most of the costs incurred were staff costs, at 67%. The UK 
GCA’s  costs  are  funded  by  a  levy  on  the  retailers  covered  by  the  scheme.  In  2016/2017  the  levy  was 
raised  to  GBP  2  million  (from  GBP  1.1  million  in  the  previous  year),  to  fund  future  investigations. 
Unspent money from the levy is returned to the contributing retailers at the end of each financial year.321 

Effect on consumers 

The  introduction  of  a  UTP  framework  at  EU  level  would  have  limited  effects  on  consumers. 
Operators do in general not claim that the use of practices that are considered UTPs (e.g. by the 
SCI) lead to lower consumer prices. Neither is there evidence that Member States with stringent 
UTP  regulation  have  witnessed  stronger  inflationary  effects  concerning  consumer  food  prices 
than those with less stringent rules or no rules on UTP: the correlation - if any (not statistically 
significant)  -  would  rather  indicate  lower  food  price  increases  in  Member  States  who  have 
stringent UTP rules, although many factors can contribute to the formation of price.322  

On the other hand, arguments suggesting negative effects on consumers due to UTPs in the long 
run,  in  particular  due  to  decreasing  innovation,  quality  or  choice,  have  been  shown  to  not  be 
conclusive  in  terms  of  empirical  evidence  (even  though  consumer  associations  and  the  United 
Kingdom’s Competition Commission argue in that direction). Evidence of long-term innovation 
effects  is  scarce,  the  difficulty  being  compounded  by  confounding  factors  that  are  difficult  to 
isolate. 

3  Summary of costs and benefits 

It  was  not  possible  to  quantify  with  precision  the  overall  benefits  from  legislation  on  UTPs. 
While there is evidence of harm and of such harm being significant and frequent (see section 6), 
the possibility to systematically collect and analyse a representative sample of data allowing for 
precise estimation of damages is not possible (notably due to the 'fear factor'). This was also an 
issue  in  the  UK’s  Groceries  Code  Adjudicator  impact  assessment323,  where  benefits  were  not 
stated. The measurement of benefits may however be improved in future through data collection 
by  MS  competent  authorities  coordinated  at  EU  level  (through  monitoring  and  enforcement 
actions),  reported  in  annual  surveys,  and  fed  into  future  policy  reviews.  Still,  a  range  for  the 
magnitude of possible benefits can be provided. 

320 United Kingdom, Spain and Czech Republic. 
321 Groceries Code Adjudicator Annual report and accounts 2016-17. 
322 See European Commission Communication, Tackling unfair trading practises in the business-to-business food 
supply chain, 15 July 2014, p.12, which uses this definition. 
323   Groceries Code Adjudicator impact assessment, May 2011. 

91 

 
 
 
                                                 
* It was not possible to quantify the benefits from legislation on UTPs. See section 6. Estimates for direct benefits 
are based on assumptions (see section 6.2.1.1). 

The table below provides an overview of the main implementation costs for the preferred option: 

Exchange rate: EUR 1.14 / GBP 1. 

*  Where  operators  have  fully  implemented  the  voluntary  SCI  principles  of  good  practice,  or  where  national 
legislation is in line with the preferred option, costs are expected to be negligible; upper bound costs are drawn from 
UK estimates for one-off costs. 

** Based on experience of large UK retailers; higher end costs would apply only where legislation does not already 
exist  or  where  the  voluntary  SCI  principles  have  not  been  implemented,  otherwise  expected  to  be  smaller  or 
negligible (baseline costs). 

*** Costs for MSs that already have legislation in place are expected to be negligible or lower end; higher bound is 
based  on  estimates  from  a  MS  where  no  legislation  exists;  existing  experience  in  the  UK  found  recurrent 
enforcement costs to be about €708 thousand per year. Other costs for administrations refer to costs of attending an 
annual coordination meeting.  

92 

One-offRecurrent One-offRecurrent One-offRecurrent Direct costs----negligible to €1.14 million*€0 to €193 thousand** per year per non-SME operator----Indirect costs------------Direct costs--------negligible to €228 thousand/€3 million*** per administrationnegligible to €708 thousand/€2.9 million*** per administration per yearIndirect costs------------Direct costs------------Indirect costsnegligible (either positive or negative)negligible (either positive or negative)------€950 per administration year***Other costsII. Overview of costs - Preferred optionCitizens/ConsumersCompliance costsEnforcement costsBusinesses Administrations 
 
 
 
  
Annex 4: Analytical methods 

The analysis in this impact assessment does not make use of modelling or other analytical techniques. 
The lack of analytical tools (such as models) in the literature on UTPs is at least in part explained by 
difficulties  in  accessing  data  on  such  practices,  due  to  concerns  of  operators  with  disclosing 
commercially sensitive information (see the ‘fear factor’). 

93 

 
 
 
Annex A: Relevant EU documents concerning unfair trading practices 

12 December 2016 

Council Conclusions, Strengthening farmers’ position in the food supply chain 
and tackling unfair trading practices 

30 September 2016 

Report of the European Economic and Social Committee of 30  September 2016 
on unfair business-to-business trading practices in  the food supply chain 

7 June 2016 

European Parliament resolution on unfair trading practices in the food supply 
chain 

29 January 2016 

Report from the European Commission to the European Parliament and the 
Council on unfair business-to-business trading practices in the food supply chain 

2 March 2016 

1 June 2015 

Opinion of the Committee on Agriculture and Rural Development on unfair 
trading practices in the food supply chain 

Commission Decision establishing the High Level Forum for a better functioning 
food supply chain 

15 July 2014 

European Commission Communication on tackling unfair trading practices 

12 November 2013 

Opinion of the European Economic and Social Committee on the ‘Green Paper 
on unfair trading practices in the business to business food and non-food supply 
chain in Europe’ 

31 January 2013 

European Commission Green Paper on unfair trading practices in the business-
to-business food and non-food supply chain in Europe 

19 January 2012 

European Parliament Resolution on imbalances in the food supply chain 

5 July 2010 

European Commission report, Retail market monitoring report, Towards more 
efficient and fairer retail services in the internal market for 2020 

28 October 2009 

European Commission Communication on a better functioning food supply chain 
and Staff Working Document, Competition in the food supply chain 

94 

 
 
 
 
 
Annex B: The “fear factor” and different enforcement 
approaches to unfair trading practices 

1  Fear factor 

A  2014  report  found  that,  based  on  these  insights,  “any  procedural  rules  concerning 
investigations must provide for rules to protect confidentiality and anonymity.”324 The results of 
the  European  Commission’s  public  consultation  in  2013  showed  that  about  67%  of  the 
respondents confirmed that fear of negative consequences in case of a complaint about UTPs is 
an important consideration.325 Only about 9% of the respondents disagreed. In a 2011 study, 64% 
of respondents stated that the reason why they did not take further steps than discussing the issue 
with their buyers was that they were afraid of “commercial sanctions”.326 11% stated that they 
were threatened with retaliation in case of taking action.  

Existing  judicial  and  administrative  redress  possibilities  in  some  Member  States  lack  in 
effectiveness in tackling the fear factor. The sentiment of a lack of protection due to the absence 
of an EU approach that would provide for minimum protection is confirmed in recent surveys. 
The  open  public  consultation  of  July  2017  showed  95%  of  respondents  to  agree  that  action 
should  be  taken  to  address  UTPs  in  the  food  supply  chain.  87%  of  respondents  believed  the 
European Union should act on UTPs. A 2016 study stated: 

“Safeguarding  the  parties  from  the  exposure  to  the  risk  of  retaliation,  emerged  as  an 
essential component of any dispute resolution process. [...] Generally speaking [...] the 
comparison  between  the  preference  for  legislation  at  EU  level  and  at  national  level 
shows that the former is clearly preferred by the vast majority of respondents.”327 

In  the  following,  UTP  enforcement  mechanisms  as  they  exist  in  Member  States  are  further 
discussed as to their effectiveness. 

2  Judicial redress 

All Member States have provisions of law that govern contracts. Private parties can rely  on the 
relevant rules to seek redress against certain UTPs in national courts that constitute violations of 
provisions  of  contract  law  (e.g.  breach  of  contract).  However,  complaining  about  UTPs  in 
national civil courts constitutes a risk for operators due to the fact that there is no possibility in 
civil law proceedings to not divulge one’s identity.328  

324 British Institute of International and Comparative Law, Fair Relations in the Food Supply Chain - Establishing 
Effective European Enforcement Structures, paper of 2014, p. 12. 
325 See European Commission, DG GROW, Summary of responses to the European Commission Green Paper, 
2013. 
326 Dedicated Research for CIAA and AIM, Unfair commercial practices in Europe, presentation, March 2011, 
slide, p. 15. 
327 Areté for European Commission, report, Monitoring of the implementation of principles of good practice in 
vertical relationships in the food supply chain, January 2016, pp. 17, 92. 
328 See for instance SEO economisch onderzoek, Oneerlijke handelspraktijken, report for the Dutch ministry of 
economy, 2013, pp. 19-20. 

95 

 
 
                                                 
A further significant limitation of the effectiveness of judicial redress, in particular for SMEs, is 
the  costs  of  legal  proceedings.329  In  the  case  of  administrative  enforcement,  the  administration 
pays  while  in  the  case  of  judicial  enforcement  the  cost  risk  is  typically  borne  by  the  plaintiff. 
Who bears the cost risk does not only have important distributional consequences, but also has 
ramifications for the effectiveness of enforcement itself.330 

In conclusion, judicial redress against UTPs can present significant shortcomings and tends to be 
ineffective  where  business  relationships  are  characterised  by  imbalances  of  bargaining  power 
between parties. This is in particular a relevant factor for SMEs, which are least likely to have at 
their  disposal  the  necessary  means  to  cover  the  potentially  high  costs  of  legal  representation, 
given the complexity of such processes and the lack of knowledge on how to enforce their rights 
in view of available remedies.331  

3  Administrative redress 

Administrative  regimes  in  certain  Member  States  can  and  do  take  into  account  the  perceived 
retaliation risk and the consequent bias against complaints in courts by mechanisms such as own 
initiative investigations or  the ability  to  treat individual  complaints confidentially or  to  receive 
complaints by producers associations.  

It is not so much any in-built limitations of the administrative redress model that as such would 
present  a  challenge  in  terms  of  UTP  enforcement  rather  than  the  heterogeneous  enforcement 
landscape332  –  to  the  extent  that  Member  States  have  publicly  enforceable  UTP  rules  -  that 
constitutes a challenge.  

Competition authorities – to the extent they are charged with the treatment of UTP complaints – 
can  often  protect  the  anonymity  of  complainants  -  albeit  sometimes  this  is  not  possible 
throughout  the  full  proceedings  –  for  instance  by  having  recourse  to  own  initiative 
investigations.333  However,  enforcement  of  competition  rules  –  and  the  attending  procedural 
powers of national competition authorities - is in general not solution for victims of UTPs. If a 
UTP causes detriment to an economic operator, but does not have an effect on consumer welfare 
or on competition as a process, then competition law does normally not provide redress.334 

A European Competition Network (ECN) Report of 2012 observes:  

“[I]n their monitoring investigations a large number of national competition authorities 
(NCAs)  have  also  identified  as  an  issue  the  existence  of  certain  practices  linked  to 
imbalances  of  bargaining  power  between  market  players  that  are  deemed  unfair  by 

329 European Business Test Panel 2012, Summary report of the responses received to the commission's consultation 
on unfair business to business commercial practices p. 37 et seq. 
330 Joint Research Center report, Unfair trading practices in the food supply chain, 2017, Swinnen and Vandevelde, 
p. 63. 
331 European Commission, Green Paper 2013, p. 15. 
332 See Annex F, Cafaggi and Iamiceli, Overview on “Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain, January 2018 and also the summary tables (Annex G). 
333 See SEO economisch onderzoek, Oneerlijke handelspraktijken, report for the Dutch ministry of economy, 2013, 
p. 19. 
334 Council Regulation (EC) No 1/2003 on the implementation of the rules on competition laid down in Articles 81 
and 82 of the Treaty, recital 9. 

96 

 
 
                                                 
many stakeholders. [...] However, the NCAs have found that most of these practices do 
not fall within the scope of competition rules at the EU level or in most of the Member 
States.  Consequently,  a  few  NCAs  have  proposed  alternative  solutions  to  tackle  them, 
such as the application of national laws against unfair trading practices or the adoption 
of codes of conduct or good practices with effective enforcement mechanisms.”335 

Competition authorities considered that in most cases these practices do not fall under the scope 
of EU- or national competition rules of Member States.336 A point in case is competition cases 
involving an abuse of dominance: unless an undertaking has a dominant position in the relevant 
market ("substantial market power") its commercial practices are not open to examination under 
classical  competition  law.  The  (ab)use  of  mere  "bargaining  power"  in  a  bilateral  commercial 
relationship  does  not  fall  within  the  scope  of  Article  102  TFEU  (see  also  Article  208  of 
Regulation 1308/2013). Having said this, some Member States have formally extended the scope 
of  their  national  competition  law  by  also  covering  a  specific  prohibition  of  UTPs  and  thereby 
expanding it into unfair dealing rules (Germany). 

4  The voluntary Supply Chain Initiative 

The  Supply  Chain  Initiative  (SCI)  was  developed  within  the  framework  of  the  Commission’s 
High Level Forum on the Better Functioning of the Food Supply Chain. It includes an agreement 
among  associations  of operators  of  the  food  supply  chain to  promote  fair  business  practices  in 
the  food  supply  chain  as  a  basis  for  commercial  dealings.337  It  is  described  in  more  detail  in  
sections 2.7 and 3.3 of the impact assessment report. 

335 European Competition Network study 2012, Report on competition law enforcement and market monitoring 
activities by European competition authorities in the food sector, paragraph 26. See also paragraph 73. 
336  Idem, paragraph 254 including box. See also Renda - Cafaggi, Study on the legal framework covering business-
to-business unfair trading practices in the retail supply chain, final report, 26 February 2014, p. 38.  
337 The High Level Forum on the Better Functioning of the Food Supply Chain comprises Member State national 
authorities responsible for the food sector at ministerial level and representatives of the private sector. As regards the 
Supply Chain Initiative, the Belgium code of conduct of 2010 was a precursor to the Supply Chain Initiative. The so 
called Agro-Food Chain consultation started in 2009 in Belgium. 

97 

 
 
 
                                                 
Annex C: UTPs, agriculture and the agri-food sector: 
quantitative evidence 

1  The food supply chain  

The food supply chain in the EU comprises all actors and activities from primary agricultural 
production  to  food  processing,  distribution,  retailing  and  consumption.  It  ensures  that  food 
products,  including  beverages,  are  delivered  to  the  general  public  for  personal  /  household 
consumption  via  retail  sales  or  food  services  (catering,  etc.).  It  also  includes  recycling  and 
disposal stages where appropriate. 

Figure 1 - Organisation of the food supply chain 

Source: CDC 

The  number  of  actors  in  the  food  chain  varies  greatly  at  each  level.  In  the  EU,  around  11 
million farms, providing work for roughly 22 million people (both full time and part time, for 
a total of around 9 million full-time equivalent) produce primary products for processing by 
about 300 thousand enterprises of the food and drink industry. The food processors sell their 
products through the 2.8 million enterprises within the food distribution (wholesale and retail 

98 

 
 
 
 
 
 
 
 
trade)  and  food  service  industry,  which  deliver  food  to  the  EU's  500  million  consumers. 
Overall, the food supply chain employs around 44 million people in the EU. 

The total turnover of food retail and food services amounted to close to EUR 1,600 billion in 
2015338, thus  representing around 14% of total consumption in  the EU. It grew annually by 
2.2% on average from 2009 to 2015. This importance is also reflected at the consumer end: 
EU households dedicate on average 14% of their expenditure to food and beverages, ranging 
from less than 10% in the UK to 32% in Romania in 2015. The gross value added generated 
in  the  food  supply  chain  has  been  growing  by  2.4%  annually  since  2008,  and  amounts  to 
slightly less than 7% of the total value added of the EU economy.  

Figure 2 - Value added in the food supply chain (billion euro) 

Source: DG Agriculture and Rural development from Eurostat (Economic accounts for agricultural, Structural Business statistics, Annual 
national accounts) 

Value added in the agricultural sector grew at a slower pace since 2008 (+1% annually) than 
the other segments of the food supply chain (+2.5% annually for processing, +3.2% annually 
for  the  food  retail  and  services  sector).  Following  the  increasing  consumer  demand  for 
convenience products and services associated to food and beverages, the processing and the 
retail stages have added additional features to the basic agricultural product, stimulated by the 
changes  of 
lifestyle,  urbanisation,  consumer  preferences  and  general  economic 
environment339.  They  have  expanded  their  share  in  the  total  value  added  in  the  food  chain, 
while the share of agriculture (around 25% of the total value added created in the food chain) 
has decreased in trend by around 0.14 percentage points per year over the period (2008-15). 

338 Sources for this paragraph are the same as the one for figure 2. Elaboration by DG AGRI from various Eurostat 
data sources (Economic accounts for agricultural, Structural Business statistics, Annual national accounts) 
339 EU Agricultural Markets Brief (2015), No. 4. 

99 

 
 
 
 
 
                                                 
While  the  added  value  of  fishery  and  aquaculture  sector  plays  a  marginal  role  within  the 
overall food supply chain, there is an upward trend mainly due to the role of aquaculture.  

Figure 3 - Value added trend of the fishing and aquaculture sector 

Source: JRC-STECF (Scientific, Technical and Economic Committee for Fisheries); Structural Business statistics, Annual national accounts) 

100 

01000200030004000500060002008200920102011201220132014Million EURMarine fishingMarineaquacultureFreshwateraquaculture 
 
 
  
Figure 4 - Share of agriculture in value added in the food supply chain (%) 

Source: DG Agriculture and Rural development from Eurostat (Economic accounts for agricultural, Structural Business statistics, Annual 
national accounts) 

2  Economics of agriculture 

From an economic perspective the agricultural sector is part of the ‘bio-economy’ and can be 
described  according  to  its  product  and  production  characteristics,  demand  and  supply 
structures, and public good characteristics340.  Agricultural products are to a greater or lesser 
extent perishable (for some products storage possibilities are limited, meaning that the price in 
the market at the time of completing production, or shortly after, is the only available price), 
produced  during  a  short  period  of  the  year  (seasonality),  following  relatively  unpredictable 
biological processes (rather than, for example, mechanical processes) that are also subject to 
natural conditions (weather). Agricultural products are also frequently homogeneous in nature 
(it is difficult to capture value by differentiating production, although some differentiation of 
products  does  take  place,  for  example  organic  production  or  the  use  of  geographical 
indications) and there are a high number of producers producing those products (agricultural 
producers  are  typically  full  price  takers).  Agriculture  faces  a  decreasing  return  per  unit  of 
input after a certain (relatively early) point: the output per unit of input is gradually lower as 

340 Mainly from Tomas Garcia Azcarate (presentation). 

101 

slope = -0.001420%21%22%23%24%25%26%27%20082009201020112012201320142015 
 
 
 
                                                 
inputs are increased (Law of Turgot). This has the implication that an agricultural producer is 
significantly  (early  on  when  compared  to  manufacturing)  limited  on  the  amount  of  income 
they can make from inputs and land available.  

Demand for and supply of agricultural products is highly inelastic (if the quantity supplied or 
demanded varies by a small amount, the effect on prices is significantly larger). This makes 
the agricultural sector particularly exposed to demand and supply shocks (relatively to other 
economic sectors), as a small reduction in demand or a small increase in supply can lead to a 
significant  reduction  in  prices  and,  eventually  incomes  (high  income  volatility).  This  is 
compounded by the fact that there are also production lags in agriculture, whereby production 
decisions  are  significantly  removed  from  placing  products  on  the  market  (production 
responses  to  market  prices  are  necessarily  relatively  slow  when  compared  to  other sectors  - 
which contributes to volatility in the face of uncertainty about future prices, for example when 
too much aggregate output is planned through individual production decisions).  

Finally agriculture typically covers a high share of the total land cover of a territory, with a 
relatively complex set of public goods (and ‘public bads’) associated to its activities, such as 
areas of biodiversity and landscape value, greenhouse gas emissions (mainly from livestock) 
and other possibly significant externalities (such as pesticide and fertiliser  run off into ground 
and  surface  waters);  food  safety  (food  security  and  food  quality)  and  population  health;  or 
animal health and welfare. 

3  Agriculture specifics 

The  EU's  farm  sector  is  one  of  the  world's  leading  food  producers  and  guarantees  food 
security for over 500 million European citizens – at a time of growing resource- and climate-
related threats in the EU and around the globe. Farmers manage over 48% of the EU's land 
(about 75% with forests) and, in addition to agricultural and food production, also provide a 
wide  range  of  public  goods,  including  environmental  services  (related  to  biodiversity,  soils, 
water,  air,  landscape),  essential  carbon  sinks  and  renewable  resources  for  industry  and  the 
energy sector, as well as social benefits to rural areas, home to 55% of the EU’s citizens. 

While  the  EU  fishery  and  aquaculture  sector  is  relatively  small  (in  2015,  about  140,000 
people  were  employed  in  the  sector  (FTE  equivalent),  representing  0.1%  of  all  jobs  in  the 
EU), the sector plays a crucial role for employment and economic activity in several regions – 
in some European coastal communities as many as half the local jobs are in the fishing sector. 
Small-scale coastal fishermen represent three quarters of the EU's sector but are responsible 
for a minor part of EU catches.  

 The Common Agricultural Policy341 has been reformed several times over the last 25 years, 
switching from a price-support system to a more market-oriented policy. Domestic EU prices 
the 
have  generally  aligned 
competitiveness of the EU agri-food industry has dramatically improved. The EU has been a 
net exporter of food and drink products since 2009342, with the value of EU agri-food exports 
rising to EUR 131 billion in 2016 (compared to EUR 60 billion in 2005). The agri-food sector 
represented  7.5%  of  total  EU  exports  in  goods  in  2016.  With  a  surplus  close  to  EUR  19 

for  agricultural  products  and 

international  prices 

to 

341 The CAP includes fisheries, see Article 38 TFEU and Annex I. 
342 For fish and seafood, the EU is a net importer of these products.  24 billion EUR worth of fish and seafood were 
imported into the EU in 2016. The volume of intra-EU exchanges is just as big. 

102 

 
 
                                                 
billion, the agri-food sector is a major contributor to the overall trade surplus of the European 
Union  in  goods  (EUR  39.3  billion  in  2016)343.  Export  activity  is  a  strong contributor  to  the 
creation of jobs344, on farms as well as in the agri-food sector. 

While  the  participation  of  the  European  agri-food  sector  in  global  markets  has  created 
important  trading  opportunities,  it  has  also  exposed  it  to  greater  market  instability.  Food 
production remains an uncertain activity, with agriculture dependent on weather and - in the 
current increasingly globalised context and more market-driven Common Agricultural Policy- 
subject  to  higher  price  volatility  arising  from  global  markets.  In  addition,  while  demand  of 
agricultural  products  is  rather  inelastic  because  largely  directed  towards  food,  agricultural 
supply (production) is also inelastic (cannot typically be adjusted rapidly): there are long lags 
between  the  production  decision  and  the  actual  production  due  to  the  biological  processes 
involved (up to several years for animal production or permanent crops) and the perishability 
of  agricultural  goods  does  not  always  allow  long  storage  periods.  Farmers,  fisherman  and 
food producers in the EU operate under strict food safety, environmental and animal welfare 
regulations in line with consumer expectations. Consumers express their increasing interest in 
having  access  to  a  variety  of  healthy  and  nutritious  food  as  well  as  to  food  with  specific 
characteristics,  such  as  organic  produce,  products  with  geographical  indications,  local 
specialities and innovative types of food. 

Average farm income per working unit is significantly below average wages obtained in other 
economic sectors in  the majority  of  Member States  (see  Figure  5).  Direct payments  narrow 
this  gap  and  contribute  to  achieving  one  of  the  Treaty's  CAP  objectives  as  defined  in  the 
Treaty on the Functioning of the European Union: to ensure a fair standard of living for the 
agricultural community. Farm households can also gain non-agricultural on-farm and off-farm 
income, just as any other household (e.g. through tourism services, energy production or part-
time work out of the farm in other activities). In the case of fisheries, no income contribution 
exists: the revenue is fully dependent on market dynamics. 

343 Monitoring EU Agri-Food Trade: Development until December 2016. 
344 A DG TRADE analysis – not specific to agriculture – suggests that 31 million jobs in the EU – 14 % of total 
employment – depend on exports, with 14,000 EU jobs added for every EUR 1 billion of exports. 

103 

 
 
  
                                                 
Figure 5 - Comparison of farm income and wages 

Source: DG AGRI from DG AGRI-FADN and Eurostat 

Due  to  structural  change  and  technological  progress  in  the  agricultural  sector,  agricultural 
production in the EU takes now place in fewer, larger and more capital-intensive farms than 
in the past. There is a continued trend of declining jobs in farming. More than one out of four 
agricultural  jobs  has  ceased  existing  since  2005  (25.4%)  and  the  number  of  jobs  has  been 
decreasing by 2% yearly between 2005 and 2013.345  

And yet, the importance of agriculture, as well as the food sector, for society extends beyond 
primary  food  production.  EU  agriculture  has  been  evolving  in  recent  decades  into  a  more 
consumer  driven,  knowledge  based,  innovative  and  high  quality  system  of  food  production, 
delivering  a  very  diverse  set  of  products  to  global  markets.  Agriculture  has  positive 
ramifications for the rural economy and digitisation has the potential for further increases in 
productivity for the food and farm sector as it does for the economy as a whole. 

At  the  primary  production  end  of  the  supply  chain,  there  are  increasing  input  costs  due  to 
competition for scarcer natural resources as well as limited possibilities for primary producers 
to  add  value  to  the  basic  product346.  Having  said  this,  EU  farmers  produce  a  wide  range  of 
safe  and  high  value  foods,  with  a  high  level  of  quality  in  terms  of  food  safety,  nutritional 

345 Facts and figures on farm structures, 2017, p. 4. 
346 But not impossible through segmentation, e.g. quality products such as organic farming or geographical 
indications. Farmers may also process and sell directly their products, and thus are not limited to the role of primary 
producers. 

104 

 
 
 
                                                 
value, taste, cultural and heritage value, methods of production, etc. (for example, there is an 
increasing  amount  of  products  with  geographical  indication  status  and  a  dynamic  organic 
sector).  
Around  66%  in  value  of  the  food  (beverages  excluded)  retail  sales347  correspond  to 
agricultural  products  as  defined  in  Annex  I  of  the  Treaty  (fish  products  included),  the  rest 
being  processed  agricultural  products  (PAPs).  Most  of  these  'agricultural  products'  are  not 
strictly primary stage products and went through some (mostly basic) processing. 

4  Structure of the different stages of the food chain 

Agricultural production is in general highly fragmented and largely comprised of small units 
in physical terms, since only 7% of farms had more than 50 ha of agricultural land in 2013348. 
At  the  EU  level  the  CR5  (concentration  ratio;  the  market  share  of  the  five  largest  firms)  at 
farm level (1)  was 0.19% in 2010 (ranging from 0.4% in Germany to around 9% in Estonia). 
The  dispersion  due  to  the  large  share  of  family-owned  farms  poses  unique  challenges, 
particularly with respect to vertical coordination and quality control over the supply chain. As 
processors  and  distributors  have  become  larger,  more  concentrated  and have  increased  their 
quality  requirements,  farmers,  without  losing  their  legal  personality,  have  established  and 
maintained  networks  to  improve  their  bargaining  position,  through  a  still  large  number  of 
producer  organisations  and/or  cooperatives,  with  different  degrees  of  organisation.  The 
market share of agricultural cooperatives is of about 40% at EU level349 (with a higher share 
in some sectors - e.g. dairy above 50%, fruit and vegetables at 54% - than others - e.g. sugar 
or pig meat below 30%; and/or a higher share in some Member States - e.g., Netherlands and 
Denmark above 60% - than others - most Eastern Europe Member states at low or very low 
levels). 

In other parts of the chain there are higher concentration levels, in both the food processing 
and  food  distribution  sectors.350  The  degree  of  concentration  in  these  sectors  has  generally 
increased over the last decades with consolidation in food processing and retailing companies 
through natural growth and mergers, particularly for retailers in the 1990s.351  

The top five food processing firms are estimated to represent an overall market share in retail 
of  a  moderate  15%  in  a  majority  of  Member  States,  but  this  global  ratio  increases  for 
determined sectors with more specialised food industries, e.g. for dairy food products, in most 
Member States, the concentration in the top five dairies (private companies, cooperatives or 
POs) is above 40% and even close to 70% in a few countries (Figure 6). In the biscuits or the 
confectionery  sectors,  the  CR5  is  above  60%352,  and  around  30%  on  average  in  processed 
meat, seafood or fruit and vegetables products (Figure 7), while in other sectors concentration 
may be  much lower (e.g. baked  goods, around 15%  on average). Data  at  EU level suggests 

347 Own estimate on the base of Euromonitor on five Member States (DE, FR, IT, ES, UK) 
348 Facts and figures on farm structures, 2017, p. 4.  
349 Bijman J. et al. (2012), Support for Farmers' Cooperatives, external study by LEI for the European Commission, 
pp 29 and following. 
350 No data is currently available concerning food services concentration. 
351 Swinnen J., (2015), Changing coalitions in value chains and the political economy of agricultural and food 
policy, Oxford Review of Economic Policy 31(1), pp. 90-115. 
352 Bukeviciute L. et al., The functioning of the food supply chain and its effect on food prices in the European 
Union, European Economy, Occasional Paper 47, 2009, p. 21. 

105 

 
 
                                                 
however  that,  beyond  high  concentration  in  certain  sectors  and  Member  States,  the  food 
processing  sector  still  has  a  large  share  of  SMEs.  At  EU  level,  SMEs  represent  49%  of  the 
turnover and 63% of total employment in the food supply sector.  

Figure 6 - Share in % of top five processing companies sales of packaged foods (2016) 

Source: DG Agriculture and Rural development from Euromonitor 

Figure 7 - EU average MS concentration ratios (CR5) per food sector 

Source: DG AGRI from Euromonitor 

106 

01020304050607080FIHRLVSEDKEELTSICZIEPOHUGRSKNLUKBGATFRPLESROBEITDEPackaged foodDairy010203040506070DairyConfectioneryBaked GoodsProcessed Fruit andVegetablesProcessed MeatProcessed seafood 
 
 
 
The  food  distribution  tier  is  also  highly  concentrated,  mainly  in  the  retail  sector.  Food 
products are distributed primarily through supermarkets, hypermarkets and discounters, which 
account on average for 71% of total packaged food sales in the EU Member States (Table 1). 

Table 1 – Share of retail sales of packaged food sold by hypermarkets, supermarkets (>400m²) and 
discounters 

Source: Euromonitor 

At EU level, the top five retailers represent (CR5) 20% of the market share on average. This 
high level of concentration has been a feature of the sector for several years. In 2007 the top 
five retailers held market shares (CR5) of more than 50% in most Member States353, with, in 
general,  higher  concentration  ratios  in  the  older  Member  States354.  More  recent  data  shows 
that  this  process  is  continuing,  with  further  mergers,  acquisitions  and  joint-ventures355.  In 
2016, based on Euromonitor data (not covering on-line and other non-store sales356), the CR5 
in  the  grocery  retail  sector  was  above  60%  in  the  half  of  Member  States  (above  80%  in 
Sweden and Finland) and below 40%  only in Italy, Bulgaria and Greece. Depending on the 

353 Ibidem. 
354 Dobson, P. (2016), Grocery retailing concentration and competition in the European Union, presentation to the 
workshop Competition in the food retail sector, 2 May 2016, European Parliament. 
355 EY, Cambridge econometrics ltd, Arcadia international (2014), The economic impact of modern retail on choice 
and innovation in the EU food sector, study for the European Commission, pp. 45-64. 
356 Non-store sales represent 2.8% of the EU retail sales of packaged food products in 2016 (Euromonitor). 

107 

201220132014201520162017Bulgaria42,645,347,348,649,750,7Croatia56,156,957,858,658,959,4Czech Republic75,475,575,775,675,575,7Estonia77,978,078,278,278,278,2Hungary58,759,660,360,761,361,7Latvia53,052,553,553,854,755,3Lithuania64,965,165,465,365,665,7Poland59,461,763,063,964,464,8Romania49,850,852,554,254,555,5Slovakia68,068,568,969,169,469,7Slovenia82,883,183,483,683,984,3Austria77,877,877,977,777,777,7Belgium70,070,070,170,370,570,5Denmark81,682,482,782,882,782,7Finland70,170,370,370,370,670,8France68,968,768,568,368,167,6Germany78,478,778,879,079,179,3Greece61,362,562,963,463,062,9Ireland66,266,266,266,466,566,4Italy64,364,564,764,864,864,8Netherlands80,380,480,580,680,880,7Portugal74,374,274,374,173,973,7Spain70,771,272,072,272,672,9Sweden81,080,980,780,380,180,0United Kingdom70,470,169,969,669,469,2EU-28*70,570,770,970,971,071,0*Malta, Cyprus, Luxemburg not taken into account 
 
 
                                                 
Members State and product concentration ratios can be higher on the processing side than on 
the retail side. Other sources (e.g. Planet Retail) show some slight differences but an overall 
common trend and similar magnitudes. Data at EU level also suggests that the food wholesale 
and retail industry is characterised by the existence of a very high number of SMEs involved 
in food trade (over 99% of the enterprises representing 54% of their turn-over 56% of the total 
employment)  

Increasing concentration is also seen through the development of international buying groups 
(IBG),  organised  by  several  retailers  to  improve  their  purchasing  power.357  The  five  major 
buying groups in the EU have a size larger than any of the single retailers in the EU358 and 6 
out  of  10  large  retailers  in  the  EU  are  members  of  and  IBG.  IBGs  usually  operate  cross-
border. 2 of the 3 main IBGs are established in Switzerland. However, the impact of IBGs on 
the food supply chain may not be as a significant as the impact of each single retailer, as it is 
estimated  that  only  5%  of  the  total  volume  purchased  by  individual  retailers  is  purchased 
through IBGs. IBGs focus on uniform and widespread consumer preferences products such as 
pasta, processed tomatoes and sauces, canned vegetables, rice, sugar, olive oil, etc. 

357 EY et al. (2014), p.52. 
358 ten Kate G. and van der Wal S. (2017), International supermarket buying groups in Europe, SOMO paper March 
2017. 

108 

 
 
                                                 
Figure 8 - Retail concentration ratio (CR5) 

5  Price transmission 

Source DG GROW from Euromonitor 

In terms of price evolution along the food supply chain, food prices grew faster than prices for 
other  goods  since  2007,  in  particular  following  food  price  spikes.359  Several  factors 
contributed  to  this:  the  increasing  global  demand  for  food,  the  slowdown  in  productivity 
growth in agriculture, as well as the increasing input cost (such as fertilisers, plant protection 
products,  etc.)  and  their  link  with  price  trends  in  other  commodities  (e.g.  energy).  Despite 
lower agricultural commodity prices since 2015, food prices trends do not seem to have yet 
followed a downwards correction compared to the general inflation rate. 

359 EU Agricultural Markets Brief (2014) No.3. 

109 

 
 
 
                                                 
Figure 9 - Inflation rate and food price index (index 100 = 2005) 

Source Eurostat 

Prices  in  the  food  supply  chain  are  also  characterised  by  strong  volatility  (price  variation 
through time at every step of the food  chain). Volatility is stronger for primary products360, 
while there tends to be a smoothening effect downstream in the food chain, essentially caused 
by the fact that (volatile-priced) raw material represents only a limited share of the cost of the 
final food product.361 Consumer prices for food products tend to rise or decrease less than the 
raw material concerned (e.g. higher volatility of wheat prices than bread prices). 

360 EU Agricultural Markets Brief (2015) No.5, Price Developments and links to food security – price level and 
volatility. 
361 Bukeviciute L. (2009), p.16. 

110 

 
 
 
                                                 
Figure 10 - Food supply chain index for EU-28 (2007-2017) 

Source: Eurostat, Food price monitoring tool and DG Agriculture and Rural Development based on data provided by the Member States 

In addition there is a debate about asymmetric price transmission in the food supply chain, in 
particular for downward price corrections: a decrease in the price of agricultural products is 
transmitted more slowly to the subsequent stages of the food supply chain than an increase in 
the price of raw materials (stickiness of prices). This may be caused by differentiated market 
powers,  but  alternative  explanations  are  also  provided  (i.e.  adjustment  costs,  menu  costs, 
government intervention)362 and these effects can vary significantly across product type, level 
of the supply chain, seasonality and Member States.363 Such asymmetry was found to be more 
pronounced in food chains of the newer Member States when compared to the Euro area in 
2009364 and in specific sectors and countries.365 

6  Rules on UTPs and price evolution366 

One concern about regulating UTPs that is often referred to is that they could result in increased prices 
for consumers, in particular if they result in legislating practices which may result in efficiency gains 
at the chain level. Other views are that they could lead to efficiency gains and lower consumer prices if 
such regulation results in the building of trust and decreased transaction costs.  

Swinnen and Vandevelde (2017)367 group Member States based on how they have undertaken action to 

362 Vavra P and Goodwin B. K. (2005) Analysis of Price Transmission Along the Food Chain, OECD Food, 
Agriculture and Fisheries Working Papers No3. 
363 Dries L. (2017), The economic impact of unfair trading practices on upstream supplier, presentation at the 
workshop 'Unfair trading practices in the food supply chain', 17 July 2017. 
364 Bukeviciute L., (2009), p.18. 
365 EU Agricultural Markets Brief, No. 5 (2015), Vavra et al. (2005). 
366 This chapter has been elaborated on the basis of a longer note authored by Pavel Ciaian and Federica Di 
Marcantonio, from JRC Seville. 
367 Swinnen, J. and S. Vandevelde  (2017), Regulating UTPs: diversity versus harmonisation of Member State rules, 
in Fałkowski, J., C. Ménard, R.J. Sexton, J. Swinnen and S. Vandevelde (Authors), F. Di Marcantonio and P. Ciaian 

111 

8590951001051101151201252007M012007M072008M012008M072009M012009M072010M012010M072011M012011M072012M012012M072013M012013M072014M012014M072015M012015M072016M012016M072017M012017M07Index 2010 = 100Farmer priceProcessor priceConsumer Price 
 
 
                                                 
 
combat UTPs by considering two criteria (i) the type of legislation used (legal treatment of UTPs) and 
(ii) the coverage of UTPs in their legislation. Then using these two criteria, they develop a ranking of 
MS on the base of the stringency of their UTP regulatory framework. A preliminary work by the JRC 
compared this ranking of Member States with the evolution of (deflated) consumer price for food for 
2010-2016 (see . 

Figure 11). 

Figure 11 - Relation between Consumer food price index and stringency of UTP rules 

Source: JRC 

The  comparison shows  that  the  correlation  between  the  stringency of  UTP  rules  (1) and  consumer 
food  prices  is  weak  (Member  States  with  the  more  stringent  rules  on  the  left  in  figure  10).  Many 
factors other than rules on UTPs are at play in the determination of the evolution of food consumer 
prices. If anything, the poor correlation shows that Member States with more stringent rules seem to 
enjoyed  lower  food  price  increases  than  Member  States  with  less  stringent  UTP  rules.  There  are 
similar results for longer periods (2005-2016; see figure 11). 

(Editors) (2017), Unfair trading practices in the food supply chain: A literature review on methodologies, impacts 
and regulatory aspects, European Commission, Joint Research Centre. 

112 

 
 
 
 
                                                                                                                                                             
Figure 12 - Relation between Producer food price index and stringency of UTP rules 

Source: JRC 

7  Intra-EU Trade 

Intra-EU trade in the food chain can be looked at both from data on firm data (exports and imports 
declared by firms per sector of activity in the economy), allowing a split per size of firms (Eurostat - 
International  Trade  in  Goods  -  Trade  by  NACE  Rev.  2  activity  and  enterprise  size  class),  or  from 
customs data (Eurostat Comext), tracing the origin of goods. 

Most of the total value of intra-EU trade in goods is by large companies, with exports at about 3,073 
billion in 2015368. A breakdown by enterprise size shows that SMEs represent approximately 39% of 
total intra-EU-trade.369 For firms in agriculture, forestry and fishing most EU trade in value is by SMEs 
(81%), while the value is  0.5% of the total intra-EU  trade. The large share of  SMEs in agriculture is 
likely  due  to  the  relatively  small  size  of  farms  when  compared  to  other  economic  actors  (large 
companies  having  more  than  250  employees).  For  food  product  manufacturers  most  EU  trade  in 

368 Source: Eurostat - International trade in goods - Trade by NACE Rev. 2 activity and enterprise size class - 
01/12/2017 update. 
369 Because of lack of data on intra-EU exports by company size for agriculture, forestry and fishing, the 
calculations exclude Estonia, Ireland, France, Italy, Cyprus, Latvia, Luxembourg, Malta, Austria, and Finland. 
Comparisons are made like-for-like for the remaining Member States. The Member States used in the calculations 
represent 76.7% of total intra-EU trade. Where data were reported but company size listed as 'unknown' these data 
were assigned to companies with 250 employees or more to provide a conservative estimate in relation to the 
significance of SMEs. 

113 

 
 
 
 
 
                                                 
value is by large companies, but SMEs have a significant share in value traded intra-EU (43%). Intra-
EU food product trade represents approximately 4.5% of total intra-EU trade.  

In terms of the number of enterprises involved in intra-EU trade, the majority of these are SMEs, as is 
to  be  expected  (approximately  88%  of  firms  involved  in  intra-EU  trade  are  SMEs,  59%  are  micro 
enterprises,  i.e.  have  fewer  than  10  employees).  The  share  of  SMEs  is  slightly  higher  for  agri-food: 
approximately 94% of agriculture, forestry and fishing firms involved in intra-EU trade are SMEs (but 
the  vast  majority  of  these  are  micro  enterprises,  at  71%)  and  approximately  91%  of  food  product 
manufacturers involved in intra-EU trade are SMEs (32% are micro enterprises). 

By  products  (Eurostat  Comext),  for  a  selection  of  products  aiming  at  representing  the  food  sector, 
the total value of intra-EU trade represented around EUR 250 billion, which is equivalent to around 
25% of the total turn-over of the food manufacturing industries (and above 15% of the turnover of 
food wholesale and retail trade turnover). In order to check whether less processed products would 
be less traded than processed ones, the share of intra-EU trade in quantity over the total production 
in the EU for several products was considered. Such a share is at a minimum around 20% for cereals 
(unprocessed) or apples and pears, and around 30% for most commodities like pigmeat, sheep meat, 
poultry, wine and even higher for tomatoes (fresh) or beef meat (40%) or olive oil (over 50%). 

Table 2 - Value of intra trade / number of firms involved in intra-EU trade per size of 
enterprise 

VALUE 

All economic activities  Agriculture,  forestry 

Value 
(thousand 
euro) 
2,357,584,071 
216,827,542 

%  of 
total 

9.2% 

and fishing 
Value 
(thousand 
euro) 
12,707,198 
3,564,990 

%  of 
total 

Manufacture  of  food 
products 
Value 
(thousand 
euro) 
105,548,153 

% 
total 

of 

28.1%  8,374,110 

7.9% 

Total 
From  10  to 
49 
employees 
From  50  to 
249 
employees 
250 
employees 
or more 
SMEs 

NUMBER  OF 
ENTERPRISES 

than 

Total 
Fewer 
10 
employees 
From  10  to 
49 
employees 

394,800,531 

16.7%  3,313,138 

26.1%  34,910,161 

33.1% 

1,445,345,221  61.3%  2,403,862 

18.9%  60,483,655 

57.3% 

912,238,850 

38.7%  10,303,336  81.1%  45,064,499 

42.7% 

All economic activities  Agriculture,  forestry 

of 

Number 
enterprises 
949,631 
563,833 

%  of 
total 

and fishing 
Number  of 
enterprises 
30,660 
59.4%  21,654 

%  of 
total 

Manufacture  of  food 
products 
Number  of 
enterprises 
18,435 

% 
total 

of 

70.6%  5,941 

32.2% 

202,002 

21.3%  5,584 

18.2%  6,580 

35.7% 

114 

 
 
 
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
4.9% 

7.3% 

1,489 

4,191 

69,110 

114,686 

From  50  to 
249 
employees 
250 
employees 
or more 
SMEs 
Notes 
**  Where  data  were  reported  but  company  size  listed  as  'unknown'  these 
data were assigned to companies with 250 employees or more. 

93.7%  16,712 

87.9%  28,727 

12.1%  1,933 

834,945 

1,723 

6.3% 

22.7% 

9.3% 

90.7% 

115 

 
 
 
 
 
 
 
 
 
 
PRODUCT/PERIOD 
01 Live animals 
02  Meat  and  edible  meat 
offal 
03  Fish  and  crustaceans, 
molluscs  and  other  aquatic 
invertebrates 
04  Dairy  produce;  birds’ 
eggs;  natural  honey;  edible 
products  of  animal  origin, 
not  elsewhere  specified  or 
included 
07  Edible  vegetables  and 
certain roots and tubers 
08  Edible  vegetables  and 
certain roots and tubers 
10 Cereals 
11  Products  of  the  milling 
starches; 
industry;  malt; 
inulin; wheat gluten 
12  Products  of  the  milling 
industry;  malt; 
starches; 
inulin; wheat gluten 
15  Animal  or  vegetable  fats 
and  oils  and  their  cleavage 
products;  prepared  edible 
fats;  animal  or  vegetable 
waxes 
1601  Sausages  and  similar 
products, of meat, meat offal 
or  blood;  food  preparations 
based on these products 
1602  Other  prepared  or 
preserved  meat,  meat  offal 

Table 3 Value of intra EU-28 trade in € 

Jan.-Dec. 2012 

Jan.-Dec. 2013 

Jan.-Dec. 2014 

Jan.-Dec. 2015 

average 2012-15 

8 035 032 611 

8 574 692 738 

8 287 481 756 

8 208 733 416 

8 415 399 996 

34 751 794 952 

35 010 425 513 

35 257 075 435 

35 286 150 349 

35 334 499 761 

13 991 110 482 

15 021 990 879 

16 262 271 457 

17 609 588 241 

15 721 240 265 

30 154 507 411 

33 498 488 464 

34 481 985 788 

31 948 431 522 

31 674 244 075 

16 261 215 099 

17 910 805 202 

17 157 930 501 

18 889 263 192 

20 020 570 549 

19 134 162 514 
14 391 229 193 

20 610 409 885 
14 055 605 383 

20 980 947 628 
12 891 025 649 

24 287 118 844 
13 154 430 816 

25 239 812 697 
12 638 984 177 

3 675 586 812 

3 854 359 829 

3 867 731 105 

3 897 716 357 

3 970 085 540 

9 719 964 520 

9 435 030 193 

8 530 418 394 

8 789 223 011 

9 355 969 287 

16 257 283 119 

16 488 253 545 

15 414 235 214 

15 831 026 509 

16 916 470 217 

2 099 080 353 

2 306 832 799 

2 329 081 121 

2 409 118 913 

2 582 628 501 

5 124 615 383 

5 245 676 709 

5 372 690 872 

5 668 458 559 

5 591 478 380 

116 

 
 
 
 
 
 
 
 
and 

other 

sugar 

or blood 
1604 Prepared or preserved 
caviar 
fish; 
caviar  and 
substitutes  prepared 
from 
fish eggs 
1605 Crustaceans, molluscs 
and 
aquatic 
invertebrates,  prepared  or 
preserved 
17  Sugars 
confectionery 
19  Preparations  of  cereals, 
flour,  starch  or  milk;  pastry 
cooks’ products 
20 
vegetables, 
other parts of plants 
21  Miscellaneous  edible 
preparations 
TOTAL FOOD 
TOTAL  FOOD  fish  included 
3  FISH  and  ex  16  Prepared 
fish products 

of 
fruit,  nuts  or 

Preparations 

2 621 406 685 

2 711 080 752 

2 823 571 128 

2 959 234 833 

2 778 823 350 

856 201 307 

869 182 902 

952 022 023 

1 129 258 120 

951 666 088 

9 268 823 595 

8 931 773 172 

8 435 873 007 

8 106 652 155 

8 611 246 113 

18 475 109 746 

19 687 440 889 

20 506 053 275 

22 207 306 291 

23 543 300 860 

16 340 884 695 

16 972 512 716 

17 258 372 601 

18 086 224 958 

19 125 947 273 

15 430 098 371 
219 119 388 374 

16 027 479 674 
228 609 786 711 

17 069 555 161 
227 840 457 507 

18 153 092 868 
234 922 947 760 

18 985 180 078 
227 623 145 088 

236 894 240 467 

247 710 168 376 

248 283 253 804 
Source: Comext 

256 980 890 559 

247 467 138 302 

Table 4 Share of intra EU trade in total turnover of food industry / food and retail services 

2012 

2013 

2014 

2015 

average 

of 

28 

Turnover or gross premiums 
- 
EU 
written 
Manufacture 
food 
products (mio €) 
Turnover or gross premiums 
written  EU  28  –  Retail  and 
food services (mio €) 
Share of food intra EU trade 

916 154.0 

938 547.2 

944 594.2 

956 083.2 

938 845 

1 516 554.8 
23.9% 

1 517 537.9 
24.4% 

1 574 759.4 
24.1% 

1 621 658.9 
24.6% 

1 557 628 
24.2% 

117 

 
 
 
 
 
 
 
 
 
on  food  industries  turnover 
(fish excluded) 
Share of food intra EU trade 
on  food  industries  turnover 
(fish included) 
Share of food intra EU trade 
on  retail  and  food  services 
turnover  

25.9% 

26.4% 

26.3% 

14.4% 

15.1% 

14.5% 

Source: Eurostat 

26.9% 

14.5% 

26.4% 

14.6% 

118 

 
 
 
Table 5 Share of Intra EU trade over total production (in %) 

Cereals (including seeds) 

1000 t 
Production 
Intra EU trade CN10 

Tomatoes 

Production* (for fresh use) 
Intra EU trade CN 0702 

Apples & pears 

Volume* (source: estimate from WAPA) 
Intra EU trade CN 0808 

 Wine  

Olive oil  

 Cattle  

 Pig  

Sheep and goats  

Poultry   

Volume  
Intra EU trade CN 2204 

Volume 
Intra EU trade CN1509 

Volume 
Intra EU trade CN0102-0201-0202 

Volume 
Intra EU trade CN0103-0203 

Volume 
Intra EU trade CN0104-0204 

Volume 
Intra EU trade CN0105-0207 

2012 

2013 

2014 

2015 

2016 

 average 

307606 
281693 
54110 
54847 
17.6% 
19.5% 
6904 
6548 
2674 
2529 
38.7% 
38.6% 
13256 
11983 
2870 
2992 
21.7% 
25.0% 
170411 
140314 
46 668 
48 541 
27.4% 
34.6% 
2483 
1463 
863 
918 
34.8% 
62.8% 
7529 
7868 
2972 
3033 
39.5% 
38.6% 
22595 
22769 
7009 
6851 
31.0% 
30.1% 
901 
928 
287 
283 
30.6% 
31.9% 
12 715  12802.96 
4 649 
36.3% 

4 569 
35.9% 

119 

330975 
57408 
17.3% 
6795 
2721 
40.0% 
14936 
2942 
19.7% 
163413 
50 307 
30.8% 
1434 
1126 
78.6% 
7695 
3037 
39.5% 
22782 
7107 
31.2% 
900 
285 
31.6% 

296835 
314409 
61406 
60922 
20.7% 
19.4% 
7260 
7848 
2821  2719.663 
34.7% 
13952 
3142 
22.5% 
161505 
47 745 
29.6% 
1743 
991 
56.9% 
8099 
3215 
39.7% 
23761 
6938 
29.2% 
931 
292 
31.4% 
13280.64  13799.32  14484.97 
5 180 
35.8% 

38.9% 
14659 
3581 
24.4% 
165310 
49 504 
29.9% 
2324 
919 
39.6% 
7846 
3135 
40.0% 
23490 
7327 
31.2% 
924 
284 
30.7% 

4 940 
37.2% 

5 102 
37.0% 

18.9% 

38.2% 

22.7% 

30.5% 

54.5% 

39.4% 

30.5% 

31.2% 

36.4% 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
 
  
  
  
  
 
  
  
  
  
 
  
  
  
Fish 
aquaculture) 

(catches 

+ 

Volume 
Intra EU trade CN 03 – 1604 - 1605 

6182 

6122 

6251 

6081 

4468 
72,3% 

4646 
75,9% 

4872 
78,0% 

5184 
85,2% 

77,8% 

120 

 
 
 
 
 
 
 
 
 
 
8  Share of cooperative products in retail sales 

Companies’  share  of  retail  sales  of  all  packaged  dairy  products  may  be  estimated  from  of 
Euromonitor data (aggregation of butter and margarine, drinking milk products, cheese, yoghurt 
and  sour  milk  drinks,  and  other  dairy  products).  The  percentage  of  cooperative  groups  is 
calculated in relation to the sales of identified companies (top 25 to 50 companies depending on 
the Member State) and extrapolated to the total. 

Table 6 - Share of cooperative dairy products in retail sales (%) 

Source: DG AGRI from Euromonitor 

9  Share of agricultural products (in the meaning of the Treaty) in retail sales 

On  the  basis  of  the  Euromonitor  database  of  retail  sales  of  packaged  food  products  and  fresh 
food  products,  one  can  calculate  the  share  of  products  under  Annex  I  in  the  Treaty  within  the 
tool food sales at the retail stage. As the classification of products in Euromonitor database on 
packaged food are not coinciding with the legal classification, some assumption should be made. 
Annex I products are assumed to be covered by the following items in Euromonitor classification 
in  the  following  calculations:  butter,  cheese,  drinking  milk  products,  yoghurt  and  sour  milk 
products  except  fruited  and  flavoured  yoghurts,  condensed  milk,  cream,  fresh  cheese,  oils, 
processed  fruit  and  vegetables,  processed  meat,  processed  seafood,  rice,  honey,  jams  and 
preserves, fruit snacks. Other packaged foods such as baby food, baked goods, breakfast cereals, 
flavoured  and  fruited  yoghurts  and  other  dairy-base  desserts,  frozen  desserts,  ice  cream,  meat 
substitutes,  ready  meals,  noodles  and  pasta,  sauces,  savoury  snacks,  chocolate  nuts  and  yeast 
spreads, snack bars and sweet biscuits are taken into account for products that are non-Annex I 
of the Treaty products. Concerning fresh foods (unpackaged), all goods covered by Euromonitor 
(eggs,  fish  and  seafood,  fruits,  meat,  nuts,  pulses,  starchy  roots,  sugar  and  sweeteners, 
vegetables)  are  clearly  Annex  I  of  the  Treaty  products  and  are  considered  as  such.  By 

121 

France201220132014201520162017AverageIdentified cooperative groups8,38,48,58,859,29,48,8Identified private groups 47,847,647,447,648,949,448,1Unidentified43,944,044,143,641,941,243,1Share cooperatives14,815,015,215,715,816,015,4GermanyIdentified cooperative groups10,811,210,910,610,610,610,8Identified private groups 34,133,233,132,932,532,833,1Unidentified55,155,656,056,556,956,656,1Share cooperatives24,125,224,824,424,624,424,6ItalyIdentified cooperative groups15,9      17,0      17,2      17,3      17,0      17,0      16,9Identified private groups 37,838,438,438,337,837,438,0Unidentified46,344,644,444,445,245,645,1Share cooperatives29,630,730,931,131,031,330,8SpainIdentified cooperative groups6,96,56,56,66,56,36,6Identified private groups 44,543,342,441,842,442,442,8Unidentified48,650,251,151,651,151,350,7Share cooperatives13,413,113,313,613,312,913,3 
 
 
 
assumption too, beverages sales as well as goods covered by the database ‘hot drinks’ (including, 
coffee, tea etc.) in Euromonitor were not considered.  

The  share  of  “agricultural”  products  (in  the  meaning  of  being  listed  in  Annex  I  of  the  Treaty) 
within packaged food sold at retail stage (Table 7) is, under these assumptions, estimated to be 
around 40% at EU level, lower in some MS like Ireland, Austria, Croatia or the UK (32 to 35%), 
and higher in other up to 45% in Sweden or 47% in Hungary. 

Table 7 - Share of ‘agricultural’ products in total retail sales of packaged food (%) 

Source DG AGRI from Euromonitor 

When adding to the picture the retail sales of fresh / unpackaged goods, the calculation can only 
be made for the 5 largest Member States (as the information on fresh products is not available in 
the  other  MS).  The  share  of  ‘agricultural’  products  in  the  total  food  retail  sales  (under  the 
assumptions  described  above)  are  of  around  66.5%  (less  in  the  UK,  France  and  Germany 
between 64 and 65%) while closer to 70% in Italy and even more in Spain (see). 

122 

2012201320142015201620172012-2017 (average)Austria33,133,133,132,932,632,432,9Belgium40,740,940,940,940,740,540,8Bulgaria43,743,343,042,943,043,143,2Croatia36,336,035,534,433,833,534,9Czech Republic42,843,543,843,443,143,643,4Denmark43,843,843,242,442,342,142,9Estonia39,640,140,640,540,540,640,3Finland40,540,941,040,440,040,440,5Greece40,740,740,740,540,139,440,4Hungary46,946,947,547,347,147,047,1Ireland32,632,432,432,532,732,932,6Latvia45,245,145,044,744,744,744,9Lithuania42,442,442,842,642,442,442,5Netherlands37,337,037,237,237,337,237,2Poland36,436,736,937,337,738,637,3Portugal44,144,344,343,843,643,443,9Romania38,439,740,040,340,741,140,0Slovakia41,842,042,542,743,343,542,6Slovenia43,343,142,942,943,143,343,1Sweden45,245,345,345,044,844,645,0France42,742,742,842,842,742,642,7Germany39,740,039,939,639,139,239,6Italy41,541,641,641,541,040,441,3Spain44,344,844,844,844,844,744,7United Kingdom34,434,334,333,833,833,834,1Total 5 MS40,040,240,139,839,739,639,9Total EU2840,040,240,139,839,839,840,0 
 
 
Table 8 Share of ‘agricultural’ products in total retail sales of packaged food (%) 

Source DG AGRI from Euromonitor 

123 

2012201320142015201620172012-2017France65,065,064,964,764,564,364,7Germany65,265,265,364,864,764,765,0Italy69,670,070,270,068,868,669,5Spain72,072,472,271,871,671,471,9United Kingdom63,363,564,064,264,565,064,15MS66,566,766,866,566,266,266,5 
 
 
 
Annex D: Table on transposition of Late Payment Directive in Member States in terms of payment 
terms370 

COUNTRY 

TRANSPOSITION OF DIRECTIVE 2011/7/EU INTO NATIONAL LEGISLATION 
(MAXIMUM DELAY FOR PAYMENT) 

Public Authorities 

Business to business (B2B) 

B2B for fresh/perishable 
products 

COMMENTS 

This law is only applicable between enterprises and 
public authorities as a general framework for 
commercial transactions. 

30 days for food retail 
industry  

http://www.lexology.com/library/detail.aspx?g=8532
815f-db3d-460c-a9a9-6d53d5838106 

Bulgarian Food act, State 
Gazette No 90 of 15 October 
1999. 

BELGIUM 

BULGARIA 

30 days with an exception 
of 60 days for public 
health authorities (Law of 
22 November 2013) 
30  days  with  a  possible 
extension to 60 days if: 

-  it  is  objectively  justified 
in  light  of  the  particular 
nature  or  feature  of  the 
goods/services; and 

- it is not grossly unfair to 
the  creditor  and  contrary 
to good faith. 

60 days with possibility of 
extension based on same 
arguments as for public 
authorities 

Where the date or period 
for payment is not fixed in 
the contract, the creditor is 
entitled to interest for late 
payment, with no 
obligation to send a 
reminder to the debtor, 
upon expiry of 14 calendar 
days following the date of 
receipt by the debtor of 

370 Some of the information provided in this table has been taken from the Interim Report for an ongoing Study of DG Grow' Business to business transactions: a comparative 
analysis of legal measures vs. soft law instruments for improving payment behaviour. 

124 

 
 
 
 
 
 
 
 
 
  
 
                                                 
CZECH 
REPUBLIC 

60 days  

DENMARK 

30 days with a possibility 
for extension if expressly 
agreed 

GERMANY 

30 days 

the invoice or an 
equivalent request for 
payment (or after receipt 
of the goods). 
30 days unless parties 
agree otherwise  

30 days with a possibility 
for extension if expressly 
agreed 
30 days.  

Where nothing is fixed in 
the contract, the payment 
is due immediately upon 
receipt of  the invoice 

30 days for food retail 
contracts  

Act 395/2009, Article 3 a) on 
Significant Market Power in 
Selling of Agricultural and 
Food Products 

in  B2B 
Any  payment  period  exceeding  60  days 
transactions  may  be  agreed  upon  only  if  it  is  not 
grossly  unfair  to  the  creditor  within  the  meaning  of 
the provisions of the EU Directive 2011/7.  

For B2B, the law implies that a higher payment term, 
whilst possible to negotiate, is likely to be considered 
unreasonable in case of a dispute. 

ESTONIA 

30 days or 60 in specific 
circumstances 

60 days; longer if expressly 
agreed and not unfair; 

https://www.bnt.eu/en/news-at-bnt-2/215-
news/988-combating-late-payments-and-improving-
payment-discipline 

IRELAND 

GREECE 

30 days with possibility to 
extend it to 60 days if 
expressly agreed by the 
parties 
60 days 

30 days if the payment 
date starts after receiving 
the goods or services or 
after their verification 
30 days with possibility to 
extend it to 60 days if 
expressly agreed by the 
parties 
60 days unless otherwise 

125 

Statutory Instruments: S.I. No. 580/2012 - European 
Communities (Late Payment in Commercial 
Transactions) Regulations 2012 

http://www.ey.com/Publication/vwLUAssets/Platis_A

 
 
 
 
 
 
 
 
 
 
 
 
 
expressly agreed and not 
unfair 

SPAIN 

30 days 

60 days 

30 days for fresh and 
perishable goods 
Ley 7/1996 Official State 
Journal 17.1.1996 

nastassiadis_-
_Late_Payments_Directive_and_transposition_in_Gre
ek_Law/$FILE/Platis-Anastassiadis-Article-Late-
Payments-20131116.pdf 

The provision of 30 days limit for payments for fresh 
food and perishable products already existed in Law 
7/1996 on retail trade. 
http://www.comercio.mineco.gob.es/es-ES/comercio-
interior/Legislacion/Pdf/mindley7_1996commin_eng.
pdf 

FRANCE 

30 days 

60 days or 45 days end of 
month maximum 

Article L443-1 of the 
Commercial Code: 

- 30 days after the end of the 
10-day period from delivery 
for purchases of perishable 
food products and frozen or 
deep-frozen meat, deep-
frozen fish, convenience 
foods and preserves made 
from perishable food 
products, with the exception 
of purchases of seasonal 
products made in the 
context of the “cultivation 
contracts” referred to in 
Articles L.326-1 to L.326-3 of 
the Rural Code; 
- 20 days after the day of 
delivery for purchases of live 
cattle intended for 

126 

 
 
 
 
 
 
consumption and fresh meat 
by-products; 
- 30 days after the end of the 
month of delivery for 
purchases of alcoholic drinks 
subject to the consumer tax 
specified by Article 403 of 
the General Tax Code…. 

30 days for fresh and 
perishable goods, Article 62 
(3) Law Decree of 24.1.2012 

http://www.lexology.com/library/detail.aspx?g=02a2
1e88-e5c2-4ac3-ad73-c827004388cd 

CROATIA 

ITALY 

30 days with possibility of 
extension to 60 days in 
specific circumstances 

30 days with exception to 
60 days for transparency 
reasons or public health 
authorities. 

60 days; a longer period 
may be agreed if expressly 
agreed, not unfair and no 
longer than 360 days 
- As a general rule, 
contractual payment terms 
must be limited to 60 
calendar days, but the 
parties may expressly 
agree (in writing) on 
payment terms longer that 
60 calendar days, provided, 
however, that such 
extension is not grossly 
unfair to the creditor; 
- If the payment term is not 
fixed in the contract: 30 
calendar days is the rule. 

CYPRUS 

30 days; 60 for health 
services 

30 days if no date specified 
under contract; 

http://www.lexology.com/library/detail.aspx?g=8468
d334-8025-404d-9cae-9d237d67734c 

60 days if agreed in the 
contract; can be extended 

127 

 
 
 
 
 
 
 
 
 
 
 
LATVIA 

30 (?) 

if parties agree and not 
grossly unfair 
60 (?) 

LITHUANIA 

30 days or longer if 
agreed by the national 
law 

60 days or longer if agreed 
under the national law 

No clear data found 

https://www.bnt.eu/en/news-at-bnt-2/215-
news/899-transposition-of-directive-2011-7-eu-into-
lithuanian-law 

20 days for the supply of 
fresh veg and fruit, if 
supplied to the same retailer 
for 3 months and more. 
Article 8 (2) of the Unfair 
Trading Practices Act. 

Maximum periods shorter 
than 60 days apply to diverse 
groups of agricultural 
products, depending on the 
payment schedule agreed 
Order of the Government of 
6 April 2000, Official Gazette 
2000, No 30-835 as last 
amended by Act published in 
Official Gazette 2013No 70-
3527. 

LUXEMBOURG 

30 days payment 
deadline unless stipulated 
otherwise by contract. A 
longer payment period, 
with a maximum of 60 
days, must be duly 
justified by the specific 
nature of the contract or 
by specific elements in 
the contract. 

60 days or longer by 
explicitly defining longer 
payment periods in their 
agreement. Nevertheless, 
the extension of this 
deadline must not be 
grossly unfair to the 
creditor. 

128 

 
 
 
   
 
 
 
 
 
HUNGARY 

30 days 

MALTA 

THE 
NETHERLANDS 

30 days or, in specific 
circumstance fixed in the 
contract 60 days 

30 days unless clearly 
specified and duly 
justified; however, the 
maximum is fixed at 60 
days 

30 days if not specified in 
the contract; 60 days 
maximum if agreed by the 
parties 

30 days, if not fixed in the 
contract with a maximum 
of 60 days if provided for in 
the contract 
30 days, if there is nothing 
specified in the contract. 
Maximum of 60 days 
unless parties otherwise 
agree and it is not 
considered grossly unfair 
for the creditor 

NL Civil Code, Article 6:119, 
particular paragraph 5. 

AUSTRIA 

30 days 

60 days 

POLAND 

30 days or 60 for medical 
entities 

Where nothing is fixed in 
the contract, the payment 
is due without any undue 
delay 
30 days, if nothing is 
stipulated in the contract; 

Maximum 60 days if 

129 

30 days for food retail 
contracts 
Act XCV of 2009 on the 
prohibition of unfair 
distributor contract vis a vis 
suppliers regarding 
agricultural an food industry 
products 
Act of 1 January 2010 

In  a  B2B  contract,  a  provision  stipulating  a  payment 
period  longer  than  60  days  is  to  be  deemed  as  a 
unilateral  and  unreasonable  derogation 
the 
detriment of the business entity and being in violation 
of  the  principles  of  proceeding  in  good  faith  and 
fairness.  Such  a  contractual  provision  may  be 
challenged in court by the creditors. 

to 

http://www.justiceservices.gov.mt/DownloadDocume
nt.aspx?app=lom&itemid=8578 

According to a COM Report on transposition into 
national legislation of Late Payments Directive, AT 
ranks among the MS with the shortest average 
number of days for payment for public contracts (7 
days). 

http://www.lexology.com/library/detail.aspx?g=3934
41db-781f-4d9e-b249-7e120d2a3d37 

 
 
 
 
 
 
 
 
 
 
 
 
 
PORTUGAL 

ROMANIA 

30 days with the 
possibility to extend it to 
a maximum of 60 days 
under specific 
circumstances or for 
public health authorities 
30 days; 60 days for 
public health authorities 

provided for in the contract 
and not grossly unfair to 
the other party. 
60 days maximum and 
parties may agree on 
longer deadlines for 
payments unless grossly 
unfair to the creditor 

60 days with the possibility 
of extension if not grossly 
unfair to the creditor and if 
stipulated in the contract. 

30 days for food retail 
contracts.    
Decree Law 118/2010 as 
amended by Decree Law 
2/2013 

7 days for fresh food and 
perishable products 

SLOVENIA 

30 days 

SLOVAKIA 

60 days maximum if 
stipulated in the contract 
with an extension up to 
120 days if expressly 
agreed and not grossly 
unfair to the creditor. 

60 days with possibility of 
extension if not grossly 
unfair for the creditor. 

45 days for perishable food. 
Article 61 b of the 
Agriculture Act 

30 days following the date of 
delivery of the duly issued 
invoice, but not more 
than 45 days after delivery of 
the food as provided for in 
Act No. 362/2012 Coll. on 
Inappropriate Conditions in 

130 

For fresh food and perishable products, the new 
deadline for payment was established by a law of 
2016, which modifies the previous law on trade of 
agricultural and agri-food products: For fresh food and 
products: 7 days (by the new law of 2016!): 
http://www.dreptonline.ro/legislatie/legea_150_2016
_modificare_legea_321_2009_comercializarea_produ
selor_alimentare.php 

 
 
 
 
 
 
 
 
 
Business Relations which 
Subject is Food; 

FINLAND 

SWEDEN 

30 days unless expressly 
mentioned in the 
contract 
30 days 

UNITED 
KINGDOM 

30 days 

30 days unless expressly 
mentioned in the contract 

30 days following the 
invoice’s issuing date. This 
can be prolonged, if parties 
explicitly give their 
consent. 
60 days if agreed in the 
contract or longer if agreed 
and not grossly unfair to 
the creditor; 

30 days, if nothing 
mentioned in the contract. 

https://www.gov.uk/government/consultations/consu
ltation-on-implementing-directive-2011-7-eu-on-
combating-late-payment-in-commercial-transactions 

131 

 
 
 
 
 
 
 
 
 
 
 
 
Annex E: Comparison of policy options 

The  aim  of  this  Annex  is  to  explain  in  greater  detail  the  comparison  of  the  different  option 
packages  presented  and  compared  in  sections  6.4  and  7  of  the  impact  assessment  report.  The 
different components included in the option packages are assessed individually in respect of their 
effectiveness and efficiency.  

Due  to  the  lack  of  robust  empirical  and  quantitative  data  (Annex  3  of  the  impact  assessment 
report) the assessment is carried out in a qualitative manner. Individual option components are 
assessed  and  ranked  on  the  basis  of  expert  judgement  based  on  the  evidence  referred  to 
throughout sections 2 to 6 of the impact assessment report. The degree to which each component 
considered allows addressing the specific objectives of the initiative (effectiveness) and at which 
efficiency - as compared to the baseline situation - is assessed on a simple five-stages grid going 
from a double minus “- -“ (more ineffective / more inefficient than the baseline) via a zero “0” 
(same as baseline) to a “double plus” + + (more effective / more efficient than the baseline). Two 
scores separated by the sign / mean that the option ranks in between the two scores concerned. 

1  Degree of harmonisation of substantive UTP rules 

The impact of the introduction of an EU partial harmonisation approach is assessed in terms of 
its effectiveness in relation to the specific objectives described in section 4. Harmonisation at EU 
level,  even  if  not  taking  the  form  of  a  detailed  harmonisation  (an  option  discarded  in  section 
5.2.2.), is effective in contributing to enhancing the level of protection against UTPs in the EU 
and to a level playing field.  

As evoked in the impact assessment report, the compliance costs (usually one-off) and the cost 
of administration should remain limited even in those few countries which do not yet have UTP 
rules  (savings  due  to  the  use  of  existing  structures  whose  powers  could  be  extended).  Savings 
through a decrease of product mismanagement or transaction costs may exist to a certain extent 
(see section 6.2.1.1 of the impact assessment report). 

Option  
Partial harmonisation of substantive UTP rules 

Effectiveness 

s
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Reduce UTPs 

+/0 

Contribute 
playing field 

to 

level 

+ 

Enable 
redress 

effective 

+ 

Efficiency 

Costs 

Savings 

0/- 

+/0 

Overall, the partial harmonisation of substantive UTP rules can be judged to be more effective 
(+) than the baseline with at least a similar degree of costs / savings as under the baseline, thus 
being more efficient than the baseline (+). 

132 

 
 
 
 
 
 
 
2  Scope of UTP definition 

Introducing a short list of prohibited unfair trading practices (Option 1) would serve to reduce 
the occurrence of these UTPs, in particular if paired with effective enforcement. Such measures 
would  be  expected  to  reduce  the  occurrence  of  the  UTPs  concerned  and  contribute  to  a  level 
playing field. 

Prohibiting  specific  UTPs  would  fall  short  of  tackling  all  UTPs  occurring  in  the  food  supply 
chain.  Member  States  would  retain  discretion  to  go  further  than  the  EU  approach  subject  to 
general  EU  law.  Some  will  do  so  (or  will  have  done  so)  while  others  may  not.  Beyond  the 
common  basis,  there  would  therefore  continue  to  be  divergence  of  rules  and  dissimilar 
commercial conditions for operators although to a lesser degree when compared to the baseline. 
Therefore,  a  general  prohibition  at  EU  level  based  on  principles  of  fairness  (Option  2)  could 
probably be more effective in terms of reducing UTPs and the divergence of rules by addressing 
a wider number of trade practices and contributing to a level playing field. 

The  relative  openness  of  a  general  UTP  prohibition  at  the  EU  level  –  for  instance  based  on 
fairness - and the possible spill-over effects it would have on national UTP rules suggest that it 
may  be  less  efficient  as  it  would raise  questions  concerning  its  complementarity  with  Member 
States measures. Legal certainty considerations may have an impact on commercial transaction 
costs under this option. 

Option 1 
Specific prohibition 

Option 2 
General prohibition 

Effectiveness 

s
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Reduce UTPs 

+ 

Contribute 
playing field 

to 

level 

+ 

Enable 
redress 

effective 

n.a. 

Efficiency 

Costs 

Savings 

0 

0 

++ 

0 

n.a. 

- 

0/- 

Overall, both options can be considered as more effective than the baseline, the first one both for 
reducing UTPs and ensuring a level playing field, the second one for covering a wider range of 
potential  UTPs.  However,  because  of  the  legal  questions  raised  in  relation  to  existing  national 
regimes and also political considerations of feasibility, the option of a general prohibition seems 
less  efficient  than  the  option  of  a  specific  prohibition  of  certain  UTPs  when  compared  to  the 
baseline. 

As  mentioned  in  sections  5.3.3,  6.1  of  the  impact  assessment  report  and  in  Annex  H  of  the 
impact assessment report (contribution of DG COMP’s chief economist), certain trade practices 
considered as unfair when applied unilaterally and/or retroactively can create efficiencies when 
agreed  ex  ante  by  the  parties.  Therefore,  a  differentiated  treatment  of  these  practices  (namely 
upfront  payments  and  contributions  to  promotion  and  marketing  costs)  depending  on  their  ex 
ante or ex post character would further improve the efficiency of Option 1. 

133 

 
 
 
 
 
 
 
3  Coverage of products 

Coverage of all food products including agricultural and processed agricultural products (Option 
1) would seem suited to address the problem of the occurrence of UTPs in the food supply chain. 
The distinction between agricultural products (which include many processed products like oils, 
preserved goods, dairy and meat products etc.) and processed agricultural products in the TFEU 
has  legal  import  but  both  types  of  products  are  traded  along  the  same  food  supply  chain 
delivering products downstream to the final consumer. 

A  comprehensive  product  coverage  would  therefore  better  address  the  existing  problem  of 
under-protection against UTPs in certain Member States in respect of the specific UTPs targeted 
by  the  initiative.  It  would  be  more  effective  in  achieving  the  specific  objectives  related  to 
reducing the occurrence of UTPs and to contributing to a level playing field. 

While an approach of only covering agricultural products (Option 2) would mean a step towards 
better governance of the EU food supply chain and partly achieve the objectives, it would only 
cover a  sub-set  of the  products  traded  in  the  food  supply  chain.  What  is  more,  as  described in 
section 6.2.2, limiting the coverage to agricultural products could have unintended consequences 
such as trade diversion. 

Option 1 
All food products 

Option 2 
Agricultural products 

Effectiveness 

s
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Reduce UTPs 

++ 

Contribute 
playing field 

to 

level 

++ 

Enable 
redress 

effective 

n.a. 

Efficiency 

Costs 

Savings 

0 

n.a. 

+ 

+ 

n.a. 

- 

n.a. 

Overall,  in  terms  of  both  effectiveness  and  efficiency,  Option  1  covering  all  food  products 
performs better than the option limited to agricultural products.  

4  Operators covered 

In  terms  of  effectiveness,  the  reduction  of  UTP  occurrences  should  be  roughly  the  same  for 
Option 1 (all operators) and Option 2 (SMEs) as in both cases weaker operators, which are the 
operators  more  likely  to  be  victims  of  UTPs,  are  covered  across  the  chain.  Having  said  this, 
Option  1  would,  by  definition,  be  more  comprehensive  than  a  targeted  applicability  that 
specifically  protects  weaker  parties  (such  as  SME  operators).  As  regards  the  contribution  to  a 
level playing field, operators throughout the EU would all be covered by the same arrangements; 
as regards enabling effective redress, the two options should not have different impacts either. 

As  regards  efficiency,  universal  applicability  of  UTP  rules  presents  a  higher  probability  that 
suppliers which are not in a situation of stark bargaining power imbalance could use UTP rules 

134 

 
 
 
 
 
 
 
to  improve  their  commercial  conditions.  This  could  result  in  possible  efficiency  losses  in  the 
food  chain,  and  therefore  higher  overall  costs  /  lower  gains  for  actors  in  chain  including 
consumers.371 Protection targeting weaker operators would avoid these risks and therefore score 
better both in terms of less costs and more gains, although it may carry a risk of inadvertent trade 
diversion due to the risk of a party’s protection deterring its partners from trading with it.372   

As regards the coverage of 3rd country suppliers, the public interest character of UTP rules – as 
opposed to a mere inter-party contractual arrangement issue – justifies covering foreign suppliers 
too  and  thus  addressing  the  risk  of  trade  diversion  as  well  dissimilar  treatment  of  foreign 
operators.373 

Option 1 

Option 2 

All operators 

Protection of SMEs 
across the chain 

Effectiveness 

Reduce UTPs 

++ 

s
e
v
i
t
c
e
j
b
o
l
a
i
c
e
p
S

Contribute 
playing field 

to 

level 

++ 

Enable 
redress 

effective 

n.a. 

Efficiency 

Costs 

Savings 

- 

+ 

++ 

+ 

n.a. 

0 

++ 

Overall, in terms of effectiveness, Option 1 covering all operators performs slightly better (++) 
than the Option limiting the coverage to transactions characterised by an imbalance of power or 
to operators involved in agriculture (between ++ and +), but a selected approach would ensure a 
higher degree of efficiency. 

5  Enforcement 

Option 1, below called “minimum enforcement requirements plus”, consists of best practices in 
terms  of  enforcement  powers  encountered  in  Member  States.  It  would  usefully  accompany  the 
UTP rules introduced at the EU level. It scores highly as regards effectiveness in relation to the 
achievement of the objectives, in particular effective redress. The actual costs of introducing the 

371 Annex H, European Commission, DG COMP Chief Economist note, Economic impact of unfair trading 
practices regulations in the food supply chain, January 2018, p. 3. 
372 See Irish Department of Jobs, Enterprise & Innovation, Regulatory Impact Analysis, 2016, Consumer Protection 
Act 2007, in relation to waterbed effects occurring across the border with UK: "Finally, such regulation might also 
make the sourcing of goods from outside of the State more cost effective for retailers/wholesalers, thereby impacting 
on Irish-based suppliers with knock-on effects for their viability, competitiveness and employment creation 
potential.", p. 9. 
373 See the Report from the European Commission to the European Parliament and the Council on unfair business-
to-business trading practices in the food supply chain, 29 January 2016, p. 2. See also British Institute of 
International and Comparative Law, Fair Relations in the Food Supply Chain - Establishing Effective European 
Enforcement Structures, paper of 2014, p. 11. 

135 

 
 
 
 
 
 
 
 
 
 
                                                 
requirements depend on the Member State concerned. 

The  restricted  list  of  enforcement  requirements  (Option  2)  also  has  the  vocation  to  improve 
effective redress in Member States. Its scope is, however, restricted to a few basic enforcement 
modalities  (competent  authority,  confidential  complaints  and  own-initiative  investigations).  It 
scores lower, therefore, on effectiveness. 

Both  options  would  operate  on  the  basis  of  a  decentralised  enforcement  by  Member  State 
authorities.  This  entails  increased  costs  for  national  administrations,  albeit  of  the  relatively 
moderate  amounts  (especially  where  economies  of  scope  can  be  realised  due  to  existing 
structures). In addition, by allowing tackling the fear factor, these options would both generate 
significant benefits for stakeholders and the food chain. 

Effectiveness 

s
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Reduce UTPs 

Option 1 
Minimum requirements + 
+ 

Contribute 
playing field 

to 

level 

+ 

Enable 
redress 

effective 

++ 

Efficiency 

Costs 

Savings 

- 

++ 

Option 2 
Minimum requirements - 

+ 

+ 

+ 

-/0 

+ 

Overall, in terms of effectiveness, a more complete enforcement regime would enable to achieve 
larger effectiveness of enforcement; in terms of efficiency, both options are comparable as costs 
and benefits increase with a more extended version.  

6  Coordination of enforcement 

the 

introduction  of  common  UTP 

The options are either to introduce a coordination mechanism bringing together Member States’ 
enforcement authorities or not. Coordination among enforcement authorities would be a measure 
accompanying 
rules  and  minimum  enforcement 
requirements.374 It would indirectly be conducive to the goals pursued by the initiative, that is to 
say the reduction and deterrence of UTPs and the levelling of the playing field for operators in 
Member  States.  Coordination  would  have  the  main  vocation  of  aligning  the  application  of  the 
EU rules. It would also serve as a platform to gather data on UTPs and their enforcement that 
could provide valuable input for a policy review and possible adjustments (see section 9 of the 
impact assessment report) as well as to exchange best practices. 

In  terms  of  coherence,  in  several  Member  States  which  have  national  rules  on  UTPs,  national 
competition  authorities  or  consumer  protection  authorities  have  been  entrusted  with  the 
enforcement  of  UTP  rules  in  the  business-to-business  field  (see  Annex  G  of  the  impact 
assessment report).  

374 Idem, p. 5. 

136 

 
 
 
 
 
 
 
                                                 
Option 1 
Network of dedicated authorities 

Effectiveness 

  Reduce UTPs 

c
i
f
i

+ 

Contribute 
playing field 

to 

level 

+ 

Enable 
redress 

effective 

n.a. 

c
e
p
S

s
e
v
i
t
c
e
j
b
o

Efficiency 

Costs 

Savings 

- 

+ 

Overall, this Option allows some degree of effectiveness with balanced costs and benefits. 

7  Legal instrument 

Options 1 and 2 would be to adopt mandatory regulatory measures in the form of respectively a 
regulation or a directive. Option 3 would be to recommend measures to Member States. In terms 
of  effectiveness,  a  mandatory  legal  tool  (regulation  or  directive)  obviously  gives  higher 
assurance  that  the  rules  will  be  applied  than  a  mere  recommendation.    A  regulation  may  be 
slightly more effective in ensuring a level playing field as it does not depend on Member States’ 
transposition  to  the same  degree  as  a  directive.  As  mentioned  in  the  impact  assessment  report, 
mutual  synergies  can  be  found  between  regulatory  and  voluntary  approaches  and  one  could 
reinforce the value and effectiveness of the other. In terms of efficiency, costs would likely be 
lower  under  a  recommendation  approach  but  “savings”  could  remain  elusive  if  the 
Commission’s recommendations are not being followed. A directive would imply lower costs in 
terms  of  adapting  national  rules  than  a  regulation  as  a  regulation  would  not  enable  Member 
States to adapt the rules in accordance with their national specificities. 

Option 1 
Regulation 

Option 2 
Directive 

Effectiveness 

s
e
v
i
t
c
e
j
b
o
c
i
f
i
c
e
p
S

Reduce UTPs 

+ 

Contribute 
playing field 

to 

level 

++ 

Enable 
redress 

effective 

+ 

Efficiency 

Costs 

Savings 

- 

0 

8  Comparison of option packages 

+ 

+ 

+ 

0 

+ 

Option 3 
Recommendations 
+/0 

+/0 

+/0 

+ 

+/0 

Four  option  packages  are  presented  in  section  6.4  of  the  impact  assessment  report.  The  four 
packages  all  presuppose  a  partial  harmonisation  of  UTP  rules  at  the  EU  level.  Against  this 
common backdrop, the differentiated packages are drawn up working off the options discussed 

137 

 
 
 
 
 
 
 
 
 
 
 
 
in sections 5 and 6 of the impact assessment report.  

A  principle-based  UTP  prohibition  in  Package  1  is  contrasted  with  a  definition  of  a  list  of  a 
limited number of manifest UTPs to be proscribed in the three other packages. The Packages 2, 
3  and  4  would  introduce  a  short  list  of  specific  UTP  rules  meant  to  protect  weaker  operators 
(SMEs). Under Packages 1 and 2 the measures apply to all operators (and products) in the food 
supply chain. Packages 2 and 3 would cover trade in food products. In Package 4 the scope is 
limited  to  agricultural  products.  The  instruments  are  a  regulation  (Package  1),  a  directive 
(Packages 2 and 3) and a recommendation (Package 4).  

Package 1 

Package 2 

Package 3 

Package 4 

"General coverage & 
enhanced 
enforcement and 
coordination" 

"Targeted coverage -  
all operators & 
enhanced 
enforcement and 
coordination" 

"Targeted coverage -  
protection of SMEs & 
enhanced 
enforcement and 
coordination“ 

"Targeted coverage -  
protection of SMEs & 
enforcement and 
coordination 
(recommendation)" 

Effective-
ness 

Efficiency 

Effective-
ness 

Efficiency 

Effective-
ness 

Efficiency 

Effective-
ness 

Efficiency 

Degree of 
harmonisation 

Scope of UTP 
rules 

Coverage of 
operators 

Coverage of 
products 

Enforcement 

Coordination 

Legal 
instrument 

+ 

+ 

++ 

++ 

++ 

+ 

+ 

+ 

- 

0 

0 

+ 

0 

- 

+ 

+ 

++ 

++ 

++ 

+ 

+ 

+ 

0 

0 

0 

+ 

0 

0 

+ 

+ 

++/+ 

++ 

++ 

+ 

+ 

+ 

0 

+ 

0 

+ 

0 

0 

+ 

+ 

++/+ 

+ 

+ 

0 

0 

+ 

0 

+ 

- 

+ 

0 

0 

By  drawing  on  the  previous  sections,  a  comparison  of  the  option  packages  in  terms  of 
effectiveness and efficiency (compared to the baseline of each subcomponent) can be carried out.  

Package 1 may bring the highest effectiveness, but there is a trade-off with the higher costs it 
entails  for  administrations  by  foreseeing  a  wide  scope  of  prohibited  trading  practices  and  for 
stakeholders by possibly entailing an issue regarding the uncertain and divergent interpretations 
of a general prohibition laid down at the EU level. Package 4 is characterised by the opposite 
trade-off: a relatively low effectiveness, particularly with regard to enforcement, but also lower 
costs of implementation. Packages 2 to 3 show intermediate results with a rather high degree of 
effectiveness for Package 2 thanks to a wider coverage of operators. From the point of view of 

138 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
efficiency,  Packages  3  and  4  are  better  targeted  to  those  operators  /  transactions  likely  to 
involve UTPs as they would be characterised by differences in bargaining power.  

Based on the above (table), Package 3 would appear as the preferred one (“Protection of SMEs 
&  enhanced  coordination  and  enforcement”).  It  is  more  effective  in  achieving  the  specific 
objectives of the initiative than Package 4, thanks to a broader coverage in terms of products and 
more  extensive  enforcement  modalities  as  well  to  it  legally  binding  delivery  (directive).  It  is 
likely to perform slightly less well in terms of effectiveness compared to a wider approach that 
would cover UTPs by way of a general prohibition (Package 1) or for all operators in the chain 
(Package  2).  However,  in  terms  of  efficiency,  Package  1  would  entail  a  higher  risk  of 
uncertainty and costs for operators in the food chain and  Package 2 a higher risk of not being 
proportionate to the objectives and therefore result in inefficiencies.   

It has to be noted that the above comparison and assessment are qualitative. There is no complete 
body  of  empirical  studies  one  could  draw  on.  The  operation  of  an  EU  facilitated  coordination 
mechanism among Member States, anchored in EU rules, could favour the development of such 
a body of empirical knowledge concerning UTPs and facilitate later improvements of the rules.  

Subsidiarity 

In terms of subsidiarity, the discarded option of detailed harmonisation (see section 5.2.2 of the 
impact  assessment  report)  would  imply  that  Member  States’  rules  are  changed,  without  them 
being  able  to  address  specificities  relating  to  national  business  customs.  At  this  stage, 
considerations of subsidiarity would militate against detailed harmonisation.  

Similarly, Package 1’s general approach in terms of UTP rules prohibited might eventually have 
a  quite  high  harmonising  impact  on  Member  States.  This  aspect  was  taken  into  account  in  the 
assessment  of  its  efficiency.  Package  1  is  likely  to  raise  more  questions  in  relation  to 
subsidiarity than the other three Packages presented.  

Proportionality 

The scope of Packages 3 to 4 which is limited to operators who are more likely to be affected by 
UTPs due to situations of imbalance of bargaining power is more proportionate in relation to the 
problem identified than the broader Packages 1 and 2. As discussed in particular in sections 5.3 
and 6.2 of the impact assessment report, addressing the different practices at issue individually 
allows  taking  possible  countervailing  efficiencies  into  consideration,  which,  as  has  been 
explained, may exists in situations where parties agree or “authorise” practices upfront and thus 
create win-win situations. Costs for the whole food chain could increase if such cases were not 
taken into due account.  

139 

 
 
 
Annex F: Study - Overview on “Specific regulations on Unfair 
Trading Practices in Member State in the Business-to-Business Retail 
Supply Chain” 

(for DG Agri and European Commission - Joint Research Center 
Ares(2017)5377697) 

by Fabrizio Cafaggi and Paola Iamiceli 

February 2018 

140 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of contents 

I) 
II) 
III) 

IV) 

Introduction 
A supply chain approach to UTPs regulation 
The current legal framework at national level:  
(1) national legislation addressing UTPs in supply chains 
(2) modes and extent of prohibition of UTPs  
The Enforcement Triangle and its current weaknesses 
A. Administrative enforcement 

A.1. Investigative powers 
A.2. Enforcement stricto sensu 
A.3. The correlation between practices and sanctions  
A.3. Commitments, Recommendations, and sanctions 

3.1) Commitments 
3.2) Recommendations 
3.3) Sanctions 

A.4. Administrative injunctions 
A.5. The boundaries between administrative and criminal sanctions and the principle 
of ne bis in idem 
A.6. Reputational sanctions via administrative enforcement 
A.7. The practices of administrative enforcement in MSs 
A.8. Conciliation and mediation by public bodies 
A.9. Monitoring Compliance by administrative bodies 

B. Judicial Enforcement 
C. Dispute resolution mechanisms 
Rethinking the policy options for UTPs in agrifood supply chains: an agenda for future 

V) 
research 

List of Tables 

Table n. 1: MSs by UTPs legislation 
Table n. 2: Cross sector or agri-food specific legislation on UTPs 
Table  n.  3:  Cross  sector  or  agri-food  specific  legislation  on  UTPs  along  the  chain  or  applicable 
toward retailers only 
Table n. 4: Degree of detail and specificity of the legislation on UTPs  
Table n. 5: UTPs covered by specific national legislation on UTPs  
Table n. 6: MSs and main enforcing authorities 
Table n. 7: Enforcement, authorities and relative power  
Table  n.  8  -  Confidentiality  of  complaints  lodged  with  administrative  authorities  and  ex  officio 
investigative powers in UTP examined legislation 
Table  n.  9:  Empowerment  of  enterprises’  associations  in  the  administrative  enforcement  of  UTP 
legislation (examples)   
Table n. 10 - Examples of correlation between practices and fines 
Table  n.  11  -  Minimum  and  maximum  threshold  for  the  imposition  of  fines  (examined  UTP 
legislation) 
Table n. 11-bis: Publication of enforcement decisions by administrative authorities (examples) 
Table n. 12: Enforcement practices during 2015-2016 
Table n. 13: Empowerment of enterprises’ associations in judicial enforcement of UTP legislation 
(examples)   
Table n. 13-bis: Publication of enforcement decisions by courts (examples) 

141 

 
 
 
 
 
 
 
 
Fabrizio Cafaggi and Paola Iamiceli 

Unfair  trade  practices  in  agri-food  supply  chains:  The  institutional 
design of compliance and enforcement.375  

I) 

Introduction 

The  reaction  to  unfair  trade  practices  (UTPs)  in  agri-food  chains  has  become  a  key  feature  of 
agricultural  policies  at  State,  regional  and  global  level.  It  is  part  of  a  more  general  phenomenon 
concerning the governance of global chains376. The increased level of global trade in agriculture has 
called  for  new  approaches  tackling  unfair  practices  beyond  states’  boundaries.  Increasingly 
bargaining  power  is  unevenly  distributed  along  global  chains.  There  has  been  a  growing 
concentration  at  the  retailer  and  processors  levels  while  producers  remain  relatively  small  and 
fragmented377.The  distribution  of  value  along  agri-food  supply  chains  has  changed  over  the  last 
years378. Low prices at production level make farmers more vulnerable to UTPs379. Costs generated 
by  regulation  have  been  shifted.  Regulatory  burdens  imposed  by  countries  of  the  product’s  final 
destination are often borne by suppliers and farmers. In such an environment the likelihood of UTPs 
in global chain increases and the lack of adequate institutional responses does not permit addressing 
the significant market failures related to UTPs. 

UTPs  hinder  trade  in  agricultural  commodities,  negatively  affect  competition,  burden  producers 
with  additional  risks  and  costs  that  may  undermine  the  objectives  of  the  European  common 
agricultural  policies  (CAP).  UTPs  can  condition  access  to  the  chain  and  determine  exit  from  the 
chain reducing farmers’ market opportunities to grow or even to survive380. 

The EU has long engaged into a policy aimed at strengthening farmers’ position in supply chains. 
Contrasting UTPs is part of this policy. The EU approach has been incremental moving from soft 
law and private regulation to harder instruments; particularly in the food sector, the desirability of 
legislation  has  been  considered  several  times  over  the  past  years.  In  July  2014,  the  Commission 
adopted  a  Communication  on  tackling  unfair  trading  practices  (UTPs)  in  the  business-to-business 

375 A Report for DGAGRI based on contract n. Ares(2017)5377697 with the JRC of Seville. 
The Report and its Annex are based on data and information gathered through a consultation launched by DG AGRI in 
October 2017 with the cooperation of experts and respondents from the 28 MSs as a follow-up of a previous consultation 
launched in 2015. For Greece only the answers provided in the 2015 survey have been available; neither survey was 
successful for Malta. 
376 See Renda - Cafaggi, Study on the legal framework covering business-to-business unfair trading practices in the retail 
supply  chain,  FINAL  REPORT  26  February  2014,  Prepared  for  the  European  Commission,  DG  Internal  Market  (DG 
MARKT/2012/049/E), 
http://ec.europa.eu/internal_market/retail/docs/140711-study-utp-legal-
framework_en.pdf. 
377 See OECD, 15 May 2014, Competition issues in the food chain industry. 
378 This distribution can be evaluated by comparing commodity prices at production and consumption level.  
379 See EU Commission Report Tackling unfair trading practices in the business-to-business food supply chain, COM 2016 
(472) final, p. “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.” 
380 See J. Lee, G. Gereffi and J. Beauvais, Global value chains and agrifood standards: Challenges and possibilities for 
smallholders in developing countries, (2012) 109(31) Proceedings of the National Academy of Science 12326-12331. 
OECD Competition issues in the food chain industry; Havinga and Verbruggen (eds.), Elgar, 2017. 

available 

at 

142 

 
 
 
 
                                                 
food supply chain381.  Meanwhile MSs have adopted different measures often combining legislation 
and forms of steered private regulation. 

Legislation exists at MSs level but regulatory approaches diverge both in terms of instruments and 
practices382.  So  far,  24  MSs  have  legislated  on  UTPs  and  12  specifically  in  food  chains383. 
Legislative  approaches  differ  between  principle  and  detailed  rules.  In  some  MSs  legislation  is 
principle-based with general clauses prohibiting unfair practices, and leaving the enforcers the task 
to  determine  specific  prohibited  practices.  In  other  MSs,  legislation  is  very  detailed,  deploying 
black lists to exemplify prohibited practices384. Many legislations combine general clauses with lists 
of  practices.  In  the  latter  case  enforcers  have  less  discretion  but  the  risk  of  under-deterrence  is 
higher when new unfair practices emerge. Principle-based legislation on the contrary leaves more 
discretion to enforcers but it can address new forms of UTPs as they arise. Differences concern also 
the instruments. A few countries have simply extended consumer protection legislation to farmers 
and  producers.  The  majority  has  opted  for  a  different  route,  enacting  specific  BtoB  legislation 
motivated by the different types of practices and the need for specific supply chain remedies. The 
private regulation regime introduced with the Principles of good practice also reflects a combination 
of general principles and a list of unfair practices paired with good practices385.   

There  is  no  full  consensus  over  the  definition  of  UTPs  and  how  different  trade  practices  are 
qualified  unfair  (see  below  for  in-depth  analysis).  Nor  there  is  agreement  over  the  instruments  in 
addition to competition law, whose effectiveness was questioned by a ECN study in 2012386. Not 
only  MSs  diverge  on  the  relative  weight  of  competition  law  versus  contract  or  extra-contractual 
liability  to  contrast  UTPs  but,  even  for  violations  addressed  with  the  same  instrument  (  contract, 
unfair  compaetition)  ,  sanctions  and  remedies  may  differ  (see  below  for  in-depth  analysis).  As  it 
will be shown, both the amount of penalties and the scope of injunctions vary within administrative 
enforcement.  These  differences  and  the  ensuing  fragmentation  has  stimulated  the  debate  over  the 
desirability of EU intervention in order to have a minimum common playing field to tackle UTPs in 
the agri-food sector.  

The  European  Commission  had  first  promoted  a  self-regulatory  regime  consistent  with  the  inter-
professional approach that characterizes European agriculture.  A set of principles were developed 

381  See  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Tackling unfair trading practices in the business-to-business food 
supply chain, Strasbourg, 15.7.2014, COM(2014) 472 final. 

382 See Renda - Cafaggi, Study on the legal framework covering business-to-business unfair trading practices in the retail 
supply chain, February 2014; Johan Swinnen and Senne Vandevelde, Regulating UTPs: diversity versus harmonisation of 
Member State rules, in Unfair trading practices in the food supply chain. A literature review on methodologies, impacts 
and regulatory aspect (2017), p. 41 ff. JRC technical report, Editors: Federica Di Marcantonio and Pavel Ciaian,  available 
at http://www.centromarca.pt/folder/conteudo/1772_7_JRC_report_utps_final.pdf (hereinafter A literature review).  
383 Among MSs having some type of UTP legislation we here include also 4 MSs (Belgium, Denmark, Finland, Sweden) 
whose legislation is merely focused on some pre-contractual practices, mainly tailored around the concept of misleading 
and aggressive practices inherited from consumer law and based on Directive 2005/29/EC. A part of the in-depth analysis 
below will only focus on the remaining 20 MS legislation. Grounds for this decision are explained below (see § III). 
384 See EU Commission Report, Tackling unfair trading practices in the business-to-business food supply chain, COM 
2016 (472) final, p. 5-6.  
385 See Vertical relationships in food supply chain. Principles of good practice (2011), available at 
http://www.supplychaininitiative.eu/about-initiative/principles-good-practice-vertical-relationships-food-supply-chain 
(hereinafter Principles of good practice) 
386 See ECN, ECN Activities in the Food Sector. Report on competition law enforcement and market monitoring activities 
by European competition authorities in the food sector, May 2012. 

143 

 
 
 
                                                 
by  various  players  of  agri-food  chain  in  2011  which  was  followed  by  an  initiative  for 
implementation and enforcement in 2013. The food supply chain initiative (FSCI or SCI) arose out 
of  a  proposal  by  the  Commission’s  High  Level  Forum  for  a  Better  Functioning  Food  Supply 
Chain387. It represents a form of ‘governed self-regulation’ with the European Commission playing 
a relevant role as a facilitator. One of the problems in FSCI is the absence of farmers’ associations, 
which decided to pull out right after its creation. The FSCI monitors and enforces the principles of 
the code of practice388. The results of this approach are unclear; whether self-regulation delivers the 
expected  results  with  a  significant  reduction  of  number  and  intensity  of  unfair  practices  is 
debated389.    It  appears  that  it  can  properly  work  as  a  complement  of  legislation  both  in  terms  of 
regulatory and enforcement practice. 

In 2016 the Commission wrote a Report on unfair trade practices in the food supply chain390. The 
Report focused on the MSs regulatory frameworks and the impact of the FSCI 391. It concluded that, 
“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.”392. 

Soon thereafter the European Parliament issued a resolution encouraging the Commission to act393. 
The European Parliament underlined the fragmentation and divergences across MSs.394 There was 
subsequently  a  report  by  the  Agricultural  market  task  force  (AMTF)  with  recommendations  on 
various  issues  including  unfair  trade  practices395.  Very  recently  (2017),  the  Commission  has 
published an inception impact assessment for consultation defining different regulatory options396. 
The two  main  variables in  the Inception assessment concern  the nature of the instruments and its 
coverage.  As  to  the  instrument,  the  alternative  is:  non-binding  instruments  like  guidelines  or 
recommendations  (option  2)  or  framework  legislation  (option  3  and  4).  As  to  the  coverage,  the 

387 See Food supply chain Initiative (FSCI). 
388 See Principles of Good Practice, 2011. 
389 See 389 Report of the Agricultural Markets Task Force (Brussels, November 2016). 
390 See Commission REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 
on unfair business-to-business trading practices in the food supply chain, January 2016. 
391 “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.” 
392 For an analysis concerning the existence of national legislation addressing UTPs in supply chains, see below, § III.  
393 See European Parliament resolution of 7 June 2016 on unfair trading practices in the food supply chain (2015/2065(INI) 
394  See  European  Parliament  resolution  7  June  2016:  “41.  Notes  that,  in  adopting  measures  to  counter  UTPs  within  the 
food supply chain, due account must be taken of the specific features of each market and the legal requirements that apply 
to it, the different situations and approaches in individual Member States, the degree of consolidation or fragmentation of 
individual markets, and other significant factors, while also capitalising on measures already taken in some Member States 
that are proving to be effective; takes the view that any proposed regulatory efforts in this area should ensure that there is 
relatively  broad  discretion  to  tailor  the  measures  to  be  taken  to  the  specific  features  of  each  market,  in  order  to  avoid 
adopting  a  ‘one-size-fits-all’  approach,  and  should  be  based  on  the  general  principle  of  improving  enforcement  by 
involving the relevant public bodies alongside the concept of private enforcement, thus also contributing to improving the 
fragmented and low level of cooperation that exists within different national enforcement bodies and to addressing cross-
border challenges regarding UTPs; 42.  Points out that the existing fragmented and low level of cooperation within different 
national enforcement bodies is not sufficient to address cross-border challenges regarding UTPs” (…) [emphasis added]. 
395 See the Report of the Agricultural Markets Task Force (Brussels, November 2016). 
396 See Inception Impact Assessment, INITIATIVE TO IMPROVE THE FOOD SUPPLY CHAIN, 25 July, 2017. 

144 

 
 
 
                                                 
alternative is between (1) an instrument to protect weaker parties or (2) an instrument regulating the 
relationships  within  the  whole  food  chain.  The  results  of  the  consultation  suggest  that  the 
opportunity for a legislative intervention should be reconsidered. 

145 

 
 
 
 
 
II)  A supply chain approach to UTPs regulation 

Unfair  trade  practices  in  supply  chains  are  quite  common,  even  more  in  agrifood.  In  the  field  of 
agriculture, the definition provided by the EU Commission in the 2014 Communication represents a 
useful  starting  point.  “UTPs  can  broadly  be  defined  as  practices  that  grossly  deviate  from  good 
commercial conduct, are contrary to good faith and fair dealing and are unilaterally imposed by one 
trading  partner  on  another.”397  UTPs  may  result  in  civil,  administrative,  and  at  times  criminal 
infringements.  As  we  shall  see  often  the  three  dimensions  co-exist  and  the  three  enforcement 
regimes are in place in relation to the same UTP.  

In its 2016 Report the Commission paid special attention to the supply chain dimension: “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)”. 

The Supply chain approach characterizes also private regulation. The Food supply chain initiative 
defines principles and rules to be applied all along the chain. The regulatory perspective combines 
general  principles  related  to  risk  allocation  along  the  chain  with  specific  rules  prohibiting 
contractual  clauses  that  distribute  risks  (and  costs)  unfairly  398.  The  principle  of  proportionality 
indirectly  emerges  from  the  description  of  the  unfair  practice,  where  a  disproportionate  risk  is 
imposed on producers399.  

Who  are  the  infringers  in  supply  chains?400  UTPs  within  a  supply  chain  may  be  decided  by  the 
chain leader and applied all along the chain. Depending on the decision-making power held by each 
party within the chain, the participants to the chain may either be co-infringers or mere ‘agents’ of 
the chain leader’s illegal behaviour. These different positions may have an effect on the liability, on 
the sanctioning, and on civil remedies. When infringers are located in different MSs or some in MSs 
and  some  outside  EU,  the  definition  of  applicable  laws  to  the  same  infringement  committed  by 
multiples infringers can become highly complex.  

Taking  a  supply  chain  approach  to  legal  regulation  has  relevant  implications.  UTPs  have  both 
efficiency  and  distributional  effects  concerning  costs  and  risks.  They  redistribute  value  along  the 
chain,  frequently  penalizing  producers  and  the  upstream  part  of  the  chain  while  benefitting  large 
buyers  in  the  downstream  part.  Unfair  distribution  of  both  risks  and  costs  often  occurs  through 
contractual provisions reproduced along the chain that may qualify as UTPs. Contract clauses may 
permit  unilateral  changes  raising  costs  and  increasing  requirements  that  producers  have  to  meet 

397 See EU Commission Report Tackling unfair trading practices in the business-to-business food supply chain, COM 2016 
(472) final. 
398 According to the code of practice general principle “RESPONSIBILITY FOR RISK: All contracting parties in the 
supply chain should bear their own appropriate entrepreneurial risks.” From the general principle the good practice is 
distilled “Different operators face specific risks at each stage of the supply chain – linked to the potential rewards for 
conducting business in that field. All operators take responsibility for their own risks and do not unduly attempt to transfer 
their risks to other parties” . See Code of practice, cit fn. 11 
399 In relation of entrepreneurial risk allocation the code states:  “Transfer of unjustified or disproportionate risk to a 
contracting party, for example imposing a guarantee of margin via payment for no performance”  
400 See F. Cafaggi and P. Iamiceli, Unfair trade practices and contracting along global supply chains: the agri-food 
industry, (2018) on file with the authors. 

146 

 
 
 
                                                 
without  a  corresponding  increase  of  prices.  These  contractual  clauses  may  be  voided  and  their 
effects removed. While it is claimed that UTPs occur throughout the chain, the most relevant ones 
happen  in  the  upper  part  of  the  chain.  Different  policy  options  might  be  taken  to  correct  unfair 
distribution.  A  first  option  regulates  UTPs  along  the  chain  regardless  of  the  potentially  injured 
party’s  economic  function;  a  second  option  would  instead  focus  on  UTPs  specifically  against 
producers. Some recent legislations at MS level applies to the entire chain401. Others only apply to 
the relation between retailers and their direct suppliers. 

Conceptually  different  approaches  might  be  used:  the  most  radical  provides  a  legal  definition  of 
supply  chain  and  applies  to  all  the  relationships  within  the  chain402.  The  less  radical  approach 
focuses  on  bilateral  relationships  between  producers  and  buyers,  but  considers  the  effects  of  the 
UTP along the chain403.  An intermediate approach focuses on bilateral relationships but considers 
the  harmful  consequences  for  the  entire  chain.  The  intermediate  approach  seems  to  be  the  most 
popular  in  the  recent  legislations.  Within  the  bilateral  approach  there  are  differences  between 
legislations that only apply to producers of agricultural commodities and legislations (like Ireland) 
that only apply to a specific contractual relationship between retailers or wholesalers and suppliers 
(see, more extensively, below, § III.1).  

According  to  the  supply  chain  approach,  if  the  large  buyer  exercises  the  UTP  in  agreement  with 
first-tier  suppliers, the supply  chain approach  would require considering the impact of  the unfair 
practice  on  the  second-  and  third-tier  suppliers.  For  example,  retroactive  conditions  after  the 
contracts  are  concluded,  delay  of  payments,  wrongful  contractual  terminations  may  have  cascade 
effects on the upstream part of the chain even if they do not directly apply to them.  These effects 
have to be considered when sanctioning the infringement and provide remedies for those harmed by 
the UTP.  

The supply chain approach has been prominent in some MSs within EU404. For example, Spain in 
2013 has subscribed to a supply chain approach regulating UTPs along the chain405. Moving from 
this perspective, Spanish legislation takes in due consideration situations in which an SME is in a 
relationship  with  a  buyer  characterized  by  economic  dependence  or  at  least  one  of  the  two 
conditions  occur  (nature  of  SME  or  economic  dependence);  according  to  the  Spanish  legislation 
economic  dependence  exists  when  the  supplier  sells  at  least  30%  of  the  overall  production  to  a 
single  buyer406.  The  European  Commission  encourages  MSs  that  are  going  to  introduce  new 
legislation to adopt a supply chain approach407.  

401 See for example Spain, Italy. Some legislations instead focus and exclude cooperatives. See below, § III.1. 
402 See F. Cafaggi, Regulation through contracts: Supply-chain contracting and sustainability standards, European Review 
of Contract Law, 2016, p. 218 seq. 
403 These two approaches are captured by option 3 and 4 of the Inception Impact assessment above cit. 
404 According to the European Commission “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” See EC Report 2016, p. 4. 
405 See in Spain, Article 3, Law 12/2013, of 2 August, measures to improve the functioning of the food supply chain: “This 
Act aims to: (...) Improve the functioning and structuring of the food supply chain to the benefit of both consumers and 
operators, while ensuring a sustainable distribution of value added across the sectors comprising it.” See also Article 5. 
Definitions: “For the purposes of this Act, the following definitions shall apply: Food supply chain: The set of activities 
carried out by the various operators involved in the production, processing and distribution of food or food products, 
excluding transportation, hotel and restaurant activities”. 
406  See Article 2(3), Law 12/2013, cit.: “The scope of Title II, Chapter I of this law [on legal form and minimum content of 
agri-food contracts] is limited to the commercial relations of operators engaging in commercial transactions the value of 

147 

 
 
 
                                                 
 
The supply chain approach to UTP is not necessarily associated with trans-border infringements. It 
can  apply  to  both  domestic  and  trans-border  chains.  Legal  aspects  concerning  transborder 
infringements  require  decisions  concerning  applicable  laws  and  criteria  to  identify  the  competent 
enforcer(s).  A  supply  chain  approach  in  transborder  infringements  should  definitely  distinguish 
between EU infringements and those that affect enterprises and farmers operating beyond the EU 
territory. Even if there is not dedicated research comparing UTPs within and outside EU it is likely 
that both the nature and the enforcement may vary depending on whether they are addressed to EU 
or non EU producers.  

III)  The current legal framework at national level:  
(1) national legislation addressing UTPs in supply chains  

Although most MSs have adopted some legislation in the area of unfair trade practices in “business 
to business” (hereinafter, BtoB) relations, the legal landscape is rather diversified across the EU.  

Among those which have introduced new rules:  

some have opted for legislation;  
some have opted for a pure self-regulatory option (e.g. Belgium, Estonia, the Netherlands); 

- 
- 
-  many have chosen a hybrid approach that combines legislation and self-regulation.  

The hybrid approach has taken different forms: in some cases (Spain, Portugal, Slovak Republic), 
there is a double track including both legislation and codes with the latter playing a complementary 
role  explicitly  acknowledged  in  legislation;  in  other  cases  the  code  definition  of  UTPs  has  been 
incorporated  by  reference  in  legislation  (Italy);  in  other  cases  the  hybridity  results  in  private  rule 
making and public enforcement (UK Grocery Code and Adjudicator).  

This contribution is focused on legislation, whereas private regulation, including the EU platform 
established  with  the  Supply  Chain  Initiative  (SCI),  will  not  be  specifically  addressed  though 
occasionally referred to.  

Within  the  context  of  legislative  instruments,  the  present  analysis  will  not  consider  legislation 
exclusively based on competition law and tailored upon article 102, TFEU, even when the concept 
of  dominant  position  and  the  relevant  market  thresholds  have  been  stretched  beyond  the  EU 
definition  (as it is  the case for Finland, e.g.). As acknowledged in  previous reports and studies,  a 
legislative approach exclusively based on competition law may fail to capture most relevant UTPs 

which exceeds € 2 500, provided that said operators find themselves in any of the following situations of imbalance:  
operators find themselves in any of the following situations of imbalance: a) One of the operators is an SME and the other 
is not. b) In the case of the marketing of unprocessed agricultural products, perishable goods and food inputs, one of the 
operators has primary agricultural, livestock, fishery or forestry producer status, or is a group having such status, and the 
other does not. c) One of the operators is economically dependent on the other operator, meaning that the total sum for 
which the former invoiced the latter accounts for at least 30% of the former's turnover during the previous year”.  
407 See Commission Report, p. 5: “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”.  

148 

 
 
 
 
                                                                                                                                                                       
in national and global supply chains408.  By contrast, the present analysis will consider legislation 
that,  though  introduced  within  a  competition  law  framework,  does  not  require  a  specific  UTPs 
impact on market competition: this may be the case when national competition law expands beyond 
the  boundaries  of  article  102,  TFEU,  sometimes  through  the  concepts  of  abuse  of  bargaining 
superior power or abuse of economic dependence (so, e.g., in Germany).   

Other  “border-line”  approaches  are  taken  by  those  MSs  that  have  only  addressed  a  very  limited 
menu  of  unfair  practices  in  the  area  of  pre-contractual  information,  advertising  and  unsolicited 
offers,  mostly  as  a  spill-over  effect  of  consumer  law  in  the  field  of  unfair  commercial  practices, 
though not necessarily through explicit extension of BtoC legislation to the BtoB domain. This is 
the case for Belgium, Denmark, Finland and Sweden. Among these, Denmark, Finland and Sweden 
have  extended,  at  least  in  part,  legislation  implementing  the  consumer  directive  on  UTPs 
2005/29/EC to BtoB relationships. In Sweden, such extension has explicitly included Annex I of the 
Directive,  listing  the  per  se  prohibited  practices.  In  Belgium,  articles  VI.104-109  of  the  Code  de 
droit économique (book VI, title 4, chapter 2) specifically addresses unfair market practices towards 
persons different from consumers and provides for a general prohibition of business acts infringing 
honest  market  practices  and  harming  other  businesses;  however,  the  type  of  practices  addressed 
remains  within  the  limited  range  above  described  with  regard  to  pre-contractual  information, 
advertising  and  unsolicited  offers.  A  fifth  MS,  namely  Austria,  has  taken  a  similar  approach  by 
extending  to  BtoB  relations  the  consumer  unfair  practice  legislation,  including  the  list  of  per  se 
unfair  practices409.  It  departs  from  the  approach  taken  in  Denmark,  Finland  and  Sweden  for  two 
reasons: (i) because it makes unfair  practices  occurred in BtoB relations subject to civil  remedies 
(namely  injunctions  and  damages)  only  to  the  extent  that  they  materially  distort  competition;  (ii) 
because  Austrian  legislation  also  addresses  UTPs  in  another  piece  of  legislation  (so  called  Local 
Supply Act), examined below. 

Due  to  its  limited  scope,  MSs  legislation  exclusively  focused  on  pre-contractual  information, 
advertising and unsolicited offers will not be examined within the variety of legislative instruments 
specifically  addressing  unfair  trade  practices  in  BtoB  relations410.  Nor  will  advertising  legislation 
(including  implementation  of  Directive  2006/116/EC)  be  specifically  considered  in  the  present 
analysis. Indeed, as shown below, policy debate on BtoB UTPs in global supply chains focuses on 
practices different from those addressed by this type of legislation.  

Last  but  not  least,  in  order  to  maintain  a  sufficient  degree  of  specificity  and  comparability,  the 
present  analysis  will  not  specifically  examine  the  role  played  in  MSs  by  general  contract  law 
and general tort law, though acknowledging that this role may be very relevant, especially when 
no specific legislative instrument is adopted.     

Within the boundaries just defined, the performed analysis leads to observe that: 

408 Renda - Cafaggi, Study on the legal framework covering business-to-business unfair trading practices in the retail 
supply chain, February 2014. See also ECN, Report on competition law enforcement and market monitoring activities by 
European competition authorities in the food sector, May 2012, p. 11. 
409 See also the German Unfair Competition Act addressing misleading and aggressive practices in both contexts of BtoC 
and BtoB relations; the list of per se unfair practices is only applicable to consumers, however. See Act Against Unfair 
Competition in the version published on 3 March 2010 (Federal Law Gazette I p. 254), as last amended by Article 4 of the 
Act of 17 February 2016 (Federal Law Gazette I p. 233). 
410 See EU Commission Report, Tackling unfair trading practices, p. 3, acknowledging that practices addressed by 
2005/29/EC Directive are rather different from the ones discussed as UTP in BtoB chains. 

149 

 
 
 
                                                 
-  4 MSs (Estonia, Luxembourg, Malta, the Netherlands) do not have any specific legislative 

instrument to address UTPs in BtoB relations; 

-  4 MSs (Belgium, Denmark, Finland, Sweden, as just described) address a very limited range 
of practices mainly focused on pre-contractual information, advertising and offer design;  
-  20 MSs have some type of legislation specifically addressing unfair trade practices in BtoB 

relations.  

Table n. 1: MSs by UTPs legislation 

NO LEGISLATION ON UTPS 

Estonia 
Luxembourg 
Malta 
(The) Netherlands 

LIMITED SCOPE LEGISLATION 
(mainly consumer-type UTP 
approach) 
Belgium 
Denmark 
Finland 
Sweden 

SPECIFIC LEGISLATION ON UTPS 

Austria 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
United Kingdom 

For  the  reasons  above  explained,  the  analysis  below  will  focus  on  the  legislation  in  the  20  MSs 
mentioned in the third indent. A list of the examined legislation is provided in the Annex. 

Different approaches may be distinguished. In some cases,  e.g. Cyprus and Germany, UTPs have 
been addressed by stretching the scope of competition law beyond the boundaries of article 102, 
TFEU, and applying the concept of abuse to economic dependence or superior bargaining power. 
This  approach has  been taken by other MSs, such as  Bulgaria, where  a  more focused and sector-
specific  legislation  has  also  been  adopted,  namely  in  the  food  sector.  In  other  cases,  now 
representing the vast majority of MSs having legislative instruments on UTPs, dedicated legislation 
has  been  adopted  outside  of  the  scope  of  national  competition  law.  This  legislation  more  and 
more tends to focus on contractual relations between suppliers and processors or retailers, covering 
the  several  stages  of  such  relations:  from  pre-contractual,  to  contract  negotiation  and  drafting, 
execution  and  termination,  therefore  going  well  beyond  the  scope  of  legislation  tailored  upon  the 
consumer  protection  approach  taken  in  some  other  MSs  (so  in  Belgium,  Denmark,  Finland, 
Sweden; see above, in this §).411 

411 In these countries, the application of consumer legislation to BtoB relationship may not allow to consider some of the 
practices concerning contractual activities. See directive 2005/29 that applies without prejudice to contract law (art. 3(2)).  

150 

 
 
 
 
                                                 
Among  the  mentioned  20  MSs,  12  have  adopted  legislative  instruments  specifically  applicable  to 
the  food supply chain, whereas in 8 MSs the UTP legislation is applicable to  all sectors, though 
sometimes  including  specific  provisions  on  practices  in  food  and  groceries  trade  (e.g.  in  France, 
Latvia and Portugal; in Latvia and in Portugal a specific list of prohibited UTPs has been provided 
for the food sector).  

151 

 
 
 
 
 
Table n. 2: Cross sector or agri-food sector specific legislation on UTPs 

CROSS-SECTOR LEGISLATION ON UTPS 

Austria 
Cyprus 
France 
Germany 
Greece 
Latvia 
Lithuania 
Portugal 

SPECIFIC LEGISLATION ON UTPS IN THE AGRI-FOOD 
SECTOR 
Bulgaria 
Croatia 
Czech Republic 
Hungary 
Ireland 
Italy 
Poland 
Romania 
Slovakia 
Slovenia 
Spain 
United Kingdom412 

Other  variables  concern  the  addressed  segment  of  supply  chains.  In  5  MSs  (Czech  Republic, 
Hungary,  Ireland,  Lithuania,  United  Kingdom),  examined  legislation  is  only  applicable  towards 
retailers; this is mostly the case for MSs adopting specific legislation in the food sector, though in 
some case (Lithuania) retailers’ practices are addressed regardless the economic sector.  

Table n. 3: Cross sector or agri-food specific legislation on UTPs along the chain or applicable toward 
retailers only 

CROSS-SECTOR LEGISLATION ON 
UTPS 

SPECIFIC LEGISLATION ON UTPS 
IN THE AGRI-FOOD SECTOR 

LEGISLATION APPLICABLE 
ALONG THE WHOLE CHAIN 

Austria 
Cyprus 
France 
Germany 
Greece 
Latvia 
Portugal 

LEGISLATION APPLICABLE 
TOWARDS RETAILERS ONLY 

Lithuania 

Bulgaria 
Croatia 
Italy 
Poland 
Romania 
Slovakia 
Slovenia 
Spain 

Czech Republic 
Hungary 
Ireland 
United Kingdom 

412 More precisely, the Groceries (Supply Chain Practices) Market Investigation Order 2009 refers to groceries going 
beyond the food sector as strictly intended: “§ 2(1) Groceries means food (other than that sold for consumption in the 
store), pet food, drinks (alcoholic and non-alcoholic, other than that sold for consumption in the store), cleaning products, 
toiletries and household goods, but excludes petrol, clothing, DIY products, financial services, pharmaceuticals, 
newspapers, magazines, greetings cards, CDs, DVDs, videos and audio tapes, toys, plants, flowers, perfumes, cosmetics, 
electrical appliances, kitchen hardware, gardening equipment, books, tobacco and tobacco products, and Grocery shall be 
construed accordingly”. 

152 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
In all the other cases legislation is applicable at all stages along the chain. It is remarkable that, even 
within  this  set  of  legislative  instruments,  variations  emerge  depending  on  supply  chain  structure. 
E.g., the Croatian Act on the prohibition of unfair trading practices in the BtoB food supply chain 
provides  for  both  general  and  specific  lists  of  prohibited  UTPs  based  on  the  type  of  relation 
(between  the  supplier  and  the  buyer  or  processor,  and  between  the  supplier  and  the  re-seller). 
Comparatively, the French Commercial Code includes both general scope provisions (e.g. art. 442-
6) and specific provisions on distribution contractual relations (e.g. art. 441-7). 

The  supply  chain  structure  comes  into  consideration  also  when  transactions  are  dealt  with  within 
cooperative  companies,  therefore  allowing  for  different  setting  of  contract  terms,  more  stable 
relations  and  different  modes  of  monitoring  over  trade  compliance.  As  a  consequence,  some 
legislation  excludes  these  transactions  from  the  scope  of  application  of  laws  on  unfair  trade 
practices; this is, e.g., the case for Poland and Spain. 

A  third  type  of  variable  concern  the  size  of  business.  Indeed,  the  size  of  potential  infringers  is 
sometimes  considered  as  a  proxy  of  bargaining  power,  as  well  as  the  size  of  potential  injured  is 
considered as a further proxy for an unbalanced relation. As a consequence, some MSs have limited 
the scope of legislation:  

(i) 
(ii) 

to businesses exceeding a certain size or  
to relations in which only one party is a small or micro enterprise.         

The  approach  under  (i),  restricting  the  scope  of  application  of  UTP  legislation  to  “large 
enterprises” only, is, e.g., taken in:  

-  Croatia, whose legislation applies to resellers whose turnover in Croatia exceeds 
approximately 132.500 eur, and to processors whose turnover in Croatia exceeds 
approximately 66.250 eur;  

-  Lithuania, whose legislation applies to retailers having significant market power, defined as 
retailers with at least 20 stores and a surface of at least 400 sqm in Lithuania and with an 
aggregate income in the last financial year that is not less than 116 million eur; 

-  Poland, whose legislation applies when the business’ trade value in the past two years or 

- 

within the UTP practices exceeds approximately 11.900 eur and when infringer’s (group’s) 
turnover exceeds approximately 23.867.100 eur;  
the United Kingdom, whose “Groceries (Supply Chain Practices) Market Investigation 
Order 2009” applies to any retailer with a turnover exceeding £1 billion with respect to the 
retail supply of groceries in the United Kingdom, and which is designated in writing as a 
Designated Retailer. 

The  approach  under  (ii),  taking  into  account  the  position  of  SMEs  as  potentially  injured  party,  is 
taken  (again)  in  Lithuanian  legislation,  that  does  not  apply  to  relations  between  retailers  having 
significant  market  power  and  suppliers  whose  aggregate  income  during  the  last  financial  year 
exceeds EUR 40 million: larger suppliers, as potential victims, are then excluded from the scope of 
application of the law. A comparable approach is only partially taken in Spanish legislation on the 
functioning of  the  food supply  chain,  when  regulating  formal  and  content  requirements  of  supply 
contracts: indeed, these apply only to transactions whose value exceed (or will presumably exceed) 
2.500 eur and one of the proxies for unbalanced relations occur; among these proxies the size of the 
harmed business as a SME is also considered. Rather similarly, in article 20, German Act against 
Restraints of Competition, abuse of relative market power is prohibited only when it involves SMEs 
as  “dependent”  enterprises.  In  the  Portuguese  DL  no.  166/2013,  whose  scope  of  application  is 

153 

 
 
 
general,  specific  provisions  have  been  provided  for  the  protection  of  small  and  microenterprises; 
moreover, fines are adapted to infringers’ size.  

As the German and the Lithuanian examples show, the reference to the size of involved enterprises 
may  be  combined  with  a  reference  to  a  situation  of  superior  bargaining  power  of  the  potential 
injurer  or  the  one  of  economic  dependence  of  the  potential  injured.  Other  pieces  of  legislation 
specifically focus on abuse of superior bargaining power or abuse of economic dependence, so 
indirectly  excluding  from  their  scope  of  application  more  paritarian  or  balanced  relations.  This  is 
the  case  for  one  of  the  pieces  of  legislation  in  Bulgaria,  for  Croatia,  Cyprus,  Czech  Republic, 
Greece, Poland, Slovenia.    

The scope of application of the examined legislation is only sometimes tailored upon the national 
v. transnational dimension of the supply chain. Recent legislative interventions (e.g. in the UK and 
Ireland) have expressly expanded the scope of application of legislation on unfair trade practices in 
favour of suppliers located out of the national territory. By contrast, the Portuguese DL n. 166/2013 
on individual restrictive commercial practices used to be applicable only to companies established 
in  national  territory.  Here,  a  recent  reform  by  Decree  Law  n.  220/2015  has  repealed  a  former 
provision excluding from the scope of application of DL n. 166/2013 the purchase and sale of goods 
and  the  provision  of  services  originating  or  terminating  in  country  outside  the  Union  or  the 
European  Economic  Area.  Therefore,  now,  similarly  to  the  Irish  law,  the  Portuguese  law  would 
apply,  for  example,  to  UTPs  occurred  within  the  relation  between  a  Portuguese  retailer  and  a 
Brazilian supplier. Comparatively, in Poland, the law on fraudulent use of contractual advantage in 
trade and agricultural products and groceries only applies to UTPs whose effects occur in  Poland; 
therefore, one could argue that it could apply, e.g., to UTPs enacted by a foreign retailer against a 
Polish  supplier.  A  similar  approach  is  taken  in  Czech  Republic.  In  practice,  this  situation  could 
entail  some  need  for  cooperation  among  administrative  authorities  in  different  UE  countries, 
whenever, e.g., an injunction  should be enforced against  a foreign  supplier,  if ever admissible. In 
the Italian legislation, the scope of application is linked with the place of delivery of goods: indeed, 
the norms apply to the extent that such place is in Italy (see art. 1, Min. decree no. 199/2012): here 
the provision focuses on the place of delivery rather than on the place in which the UTP effects are 
generated.    

More generally, it should be noted that the “source” of UTPs, especially when based on the use of 
contract terms or business protocols, may be traced back in a different MS from the one where the 
harmed business(es) is/are located and the effects of UTPs are produced, either because the supplier 
trades  with  a  foreign  client  or  because,  although  the  contract  is  stipulated  with  a  local  buyer,  the 
latter  is  “controlled”  by  a  foreign  company  imposing  the  contested  practice  along  the  chain. 
Defining the scope of application of national legislative instruments disregarding the international 
dimension  of  supply  chains  may  lead  to  leave  relevant  practices  out  of  the  reach  of  the  adopted 
instruments.      

III. The current legal framework at national level:  
(2) modes and extent of prohibition of UTPs  

National  legal  frameworks  are  also  rather  diversified  in  respect  of  the  modes  and  extent  of 
prohibition of UTPs. As specified above, the present analysis is limited to the legislation identified 
in the 20 MSs having legislative instruments specifically addressing UTPs in supply chains, without 
being limited to pre-contractual aggressive and misleading practices or misleading advertising (see 
table n. 1). 

154 

 
 
 
 
UTPs  are  often  prohibited  through  the  use  of  general  clauses  and  general  principles.  Examples 
include: 

-  prohibition of unequal treatment of entrepreneurs unless objectively justified (Austria); 
-  prohibition of every act/omission by an undertaking with a stronger bargaining position 

when in conflict with fair business practice damaging or impairing the interest of a weaker 
party (Bulgaria);   

-  prohibition of abuse/exploitation of superior/significant bargaining power (Croatia, Czech 

Republic, Italy, Slovenia); 

-  prohibition of abuse of relative market power, consisting in unfair treatment or objectively 

unjustified discrimination in case of economic dependence of SMEs (Germany); 

-  prohibition of abuse of economic dependence (Cyprus, Greece); 
- 

liability for imposing significant unbalance between parties’ rights and obligations (France, 
Italy); 

-  prohibition of imposing unfair contractual advantage contrary to the principles of morality 

and threatening the essential interest of the other party (Poland); 

-  prohibition of unfair conduct (Hungary, Italy) or conducts in contrast with fair practice 
(Latvia), of actions contrary to fair business practices (Lithuania), of unfair contractual 
conditions and unfair trade practices (Slovak Republic); 

-  duty to conduct trading relationships in good faith and in a fair, open and transparent manner 

and to respect the terms and conditions of the agreed contracts (Ireland); 

-  duty to comply with principles of transparency, fairness, proportionality, reciprocity in 

contractual obligations (Italy); 

-  duty to comply with the Principles of Good Practice in Vertical relationships in the Food 
Supply Chain, developed by the European Commission in the B2B Platform of the High 
Level Forum for a Better Functioning Food Supply Chain (Italy); 

-  duty to comply with principles of balance and fair reciprocity between parties, freedom to 

enter into agreements, goodwill, mutual interest, equitable sharing of risks and 
responsibilities, cooperation, transparency and respect for free market competition (Spain); 

-  duty to comply with the principle of fair dealing (United Kingdom).  

As shown above, the use of principles and the one of general clauses are rather diversified across 
MSs not only because different ones are referred to in different systems but also because they are 
differently  defined  in  each  legislation.  E.g.  the  concept  of  superior  bargaining  power  may  be 
defined  having  regard  to  the  volume  of  sales  (so  in  the  Slovenian  law),  the  characteristics  of  the 
structure of the relevant market and the particular legal relationship between the enterprises, taking 
into  consideration  the  level  of  dependence  between  them,  the  nature  of  their  business  and  the 
difference in the scale thereof, the probability of finding of an alternative trade partner, including 
the  existence  of  alternative  supply  sources,  distribution  channels  and/or  customers  (as  in  the 
Bulgarian law) or having exclusive regard to cases in which economic dependence involve SMEs 
(as in Germany). 

Only  in  a  few  cases  (Portugal,  Romania)  prohibitions  are  listed  with  regard  to  specific  conducts 
without relying on general clauses and general principles. Also rare is the use of general clauses not 
coupled  with  list  of  prohibited  conducts  (e.g.  in  the  German  Act  against  Restraints  of 
Competition).  Indeed,  in  the  large  majority  of  systems,  general  principles  and  general  clauses are 
always  complemented  by  either  examples  or  more  structured  lists  of  prohibited  practices  falling 
under  the  umbrella  of  the  general  prohibition.  In  some  cases,  it  is  specified  that  the  list  is  not 

155 

 
 
 
complete and any other conduct infringing the general prohibition must be sanctioned (e.g. Italy) or 
that the list provides only examples of prohibited conducts (e.g. Poland); in other cases, it is more 
doubtful  whether  unlisted  conducts  may  be  sanctioned  under  the  general  prohibition,  especially 
when the general prohibition is very open and the list of prohibited conducts rather detailed (this is 
the  case  for  Hungary,  e.g.).  This  extension  may  be  particularly  critical  in  systems  in  which 
enforcement  is  mainly  criminal  (Ireland,  Romania)  and  the  principle  of  legality  may  reduce 
extensive interpretation of law identifying crimes.  

The use of list does not totally eliminate the need for discretionary powers when interpreting and 
apply the rules. Indeed, even when prohibited conducts are listed, the use of open terms (such as 
proportional, reasonable, justified, significant unbalance, etc.) is very common, though diversified 
across countries (see tables 2.1 and 2.2 in the Annex). 

Table n. 4: Degree of detail and specificity of the legislation on UTPs  

ONLY GENERAL CLAUSES AND 
GENERAL PRINCIPLES 

ONLY LISTS OF PROHIBITED 
PRACTICES 

Germany 

Portugal 
Romania 

GENERAL PRINCIPLES, GENERAL 
CLAUSES, EXAMPLES OR LISTS OF 
PROHIBITED PRACTICES 
Austria 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
France 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Poland 
Slovakia 
Slovenia 
Spain 
United Kingdom 

When it comes the  specific UTPs covered by examined legislation (dedicated UTP legislation in 
the 20 above mentioned MSs), fragmentation is even wider.  

The table below addresses the following practices: 

1) 
2) 

3) 
4) 
5) 

6) 

Payment periods longer than 30 days 
Unilateral and retroactive changes to contracts (concerning volumes, quality standards, 
prices) 
Contributions to promotional or marketing costs  
Claims for wasted or unsold products 
Last-minute order cancellations concerning perishable products, or unfair contract 
termination in general  
Requests for upfront payments to secure or retain contracts 

156 

 
 
 
 
 
 
 
 
 
It is mainly based upon the list of practices proposed in the Report of the Agricultural Markets Task 
Force413, partially complemented by the shorter list of UTPs identified by the EC Report in 2016 as 
“core  types  of  UTPs  broadly  covered  by  all  regulatory  frameworks”414.  It  also  draws  on  the  SCI 
code and the annexed list of practices therein included, whose development has contributed to the 
definition of relevant practices.  

More specifically, in the present analysis the concept of “last-minute order cancellations concerning 
perishable products”, used by the AMTF, has been here expanded towards a more general concept 
of “unfair termination of a contractual relationship” along the lines of the shorter EC list. Compared 
with the latter, the AMTF list is more selective and less dependent on open terms and concepts. So, 
e.g., the AMTF reference to prohibition of contributions to promotional or marketing costs could be 
linked with the more general prohibition of asking “the other party for advantages or benefits of any 
kind without performing a service related to the advantage or benefit asked”, identified in the 2016 
EC  Report;  and  the  AMTF  reference  to  prohibition  of  unilateral  and  retroactive  changes  to 
contracts, claims for wasted or  unsold  products, requests for upfront payments to  secure or  retain 
contracts  could  be  read  within  the  more  general  prohibition  of  “duly  or  unfairly  shifting  its  own 
costs or entrepreneurial risks to the other party”, identified in the 2016 EC Report. The reference to 
unilateral  and  retroactive  changes  to  contracts  is  common  to  both  lists,  although  the  Commission 
Report  explicitly  considers  the  possibility  that  changes  may  be  admitted  through  contract  clauses 
(this  possibility  will  be  separately  examined  below).  Payment  delays  are  only  addressed  in  the 
AMTF list. 

Table n. 5: UTPs covered by specific national legislation on UTPs  

SELECTED PRACTICES 

PAYMENT PERIODS LONGER THAN 30 DAYS 

UNILATERAL AND RETROACTIVE CHANGES TO 
CONTRACTS (CONCERNING VOLUMES, QUALITY 
STANDARDS, PRICES) 

CONTRIBUTIONS TO PROMOTIONAL OR 
MARKETING COSTS 

MSS, WHOSE UTP LEGISLATION COVERS THE 
SELECTED PRACTICES 
Bulgaria, Croatia, Czech Republic, France, 
Hungary, Ireland, Italy, Latvia, Poland, Romania, 
Slovakia, Slovenia, Spain, UK 

In other MSs provisions on late payment are 
addressed in the legislation implementing the Late 
Payment Directive 

Bulgaria,  Croatia,  Hungary,  Ireland,  Italy,  Latvia, 
Lithuania, Portugal, Spain, UK 

Bulgaria, Czech Republic, France, Hungary, 
Ireland, Italy, Latvia, Lithuania, Portugal, Romania, 
Slovenia, Spain, UK 

413 Report of the Agricultural Markets Task Force (Brussels, November 2016) “Enhancing the position of farmers in the 
supply chain” (p. 34, § 113); this is the list of prohibition therein proposed: “i. no payment periods longer than 30 days; ii. 
no unilateral and retroactive changes to contracts (concerning volumes, quality standards, prices); iii. no contributions to 
promotional or marketing costs; iv. no claims for wasted or unsold products; v. no last-minute order cancellations 
concerning perishable products; vi. no requests for upfront payments to secure or retain contracts.” 
414 EU Commission Report “Tackling unfair trading practices in the business-to-business food supply chain”, COM 2016 
(472) final, p. 5, listing the following prohibitions:  “- 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.”. 

157 

 
 
 
 
 
                                                 
CLAIMS FOR WASTED OR UNSOLD PRODUCTS 

LAST-MINUTE ORDER CANCELLATIONS 
CONCERNING PERISHABLE PRODUCTS, OR 
UNFAIR CONTRACT TERMINATION IN GENERAL 

REQUESTS FOR UPFRONT PAYMENTS TO SECURE 
OR RETAIN CONTRACTS 

Bulgaria, Croatia, Czech Republic, Hungary, 
Ireland, Latvia, Lithuania, Portugal, Slovenia, 
Spain, UK 

Bulgaria, Czech Republic, Croatia, Cyprus, France, 
Greece, Ireland, Italy, Poland, Romania, UK 

Croatia, Czech Republic, France, Hungary, Ireland, 
Italy, Latvia, Lithuania, Poland, Portugal, Spain, 
United Kingdom 

Particularly  in  this  case,  figures  must  be  considered  as  showing  general  trends  rather  than 
conclusive evidence. Indeed, some of the listed practices (e.g. payment periods longer than 30 days) 
may  be  prohibited  in  other  pieces  of  legislation  than  those  here  examined  (e.g.  legislation 
implementing the Late Payment Directive), or some of the specific conducts here considered (e.g. 
imposition of contribution to promotional marketing costs) may be ignored as such by the lists at 
stake  though  being  addressed  through  more  general  prohibitions  (e.g.  concerning  imposition  of 
costs  not  related  with  provided  services)  or  through  the  use  of  general  clauses  (e.g.  abuse  of 
superior bargaining power), as seen above. Under this perspective some more detailed information 
is provided in table n. 2.3 in the Annex. 

Moving from this clarification and within these limitations, one could observe that even a relatively 
commonly  addressed  practice  (e.g.  unfair  contract  termination)  is  not  specifically  referred  to  in 
almost half of MSs specifically regulating UTPs in BtoB relations and other mentioned UTPs (e.g. 
unilateral  and  retroactive  changes  to  contracts,  contributions  to  promotional  and  marketing  costs 
and requests for upfront payments to secure or retain contracts) are addressed in less than two thirds 
of these MSs. No specific prohibition is common to all legal systems, even though, once again, the 
presence of general prohibitions based on fairness may permit coverage of these UTPs. 

Even when the same type of practice is covered in several MSs, the mode of regulation varies. E.g. 
in Slovenia, payment periods are targeted when longer than 45 days (rather than 30).  

Another major distinction regards the possibility that some UTPs are exempted if business conduct 
is  expressly  regulated  through  contract  clauses  that  parties  have  agreed  upon.  Two  types  of 
provisions should be distinguished in this case: 

- 

-  mere exemption, as shown in the following example: “The contract for purchase of food for 
resale cannot: (…) 4. be amended unilaterally, unless this is explicitly provided for in the 
contract” (art. 19.1, Bulgarian Foodstuff Act; similar provisions are adopted in Latvian and 
Lithuanian legislation, although both include examples of the second type here below); 
exemption subject to compliance with contract regulation, as shown in the following 
example: “This Regulation prohibits a retailer or wholesaler from varying, terminating or 
renewing a contract with a supplier unless the contract expressly provides for such 
variation, termination or renewal or agreed circumstances when such variation, 
termination or renewal can occur. Thus, unilateral retrospective variations are not permitted. 
In addition, the agreed contract must specify the period of written notice that must be given 
prior to any such variation, termination or renewal. The period of such notice will be 
reasonable and have regards to all the circumstances of the contract, including:  

o 

the duration of the contract; 

158 

 
 
 
 
o 

o 

o 

the frequency with which orders are placed by the retailer or wholesaler for the 
grocery goods concerned; 
the characteristics of the grocery goods concerned including the durability, 
seasonality and external factors affecting their production; and 
the value of any order relative to the annual turnover of the supplier in question” 

(Regulation  5,  Irish  Consumer  Protection  Act  2007  (Grocery  Goods  Undertakings)  Regulations 
2016  (S.I.  No.  35  Of  2016)).  Similar  provisions  are  adopted  in  the  United  Kingdom,  Spain  and, 
together with examples of the first type of provisions above, in Latvian and Lithuanian legislation. 

Table 2.2. in the Annex shows more examples of both types of exemption. 

Whereas the former type of exemption may create room for abuse when drafting contract clauses, 
the  latter  type  limits  this  risk  by  adopting  contractual  procedures  or  specifying  requirements  for 
contractual exemption. 

159 

 
 
 
 
 
IV)   The Enforcement Triangle and its current weaknesses 

The  enforcement  of  UTPs  is  decentralized.  It  is  based  on  a  triangle  including  administrative, 
judicial,  and private dispute resolution. MSs are responsible to detect and sanction both domestic 
and transborder infringements. Not only substantive rules describing unfair trade practices but also 
enforcement mechanisms have been introduced by the MSs legislations to address an enforcement 
gap.  The  new  legislation  adds  and  does  not  replace  general  rules  in  civil  codes  or  statutory 
instruments. 

The  enforcement  mechanisms  comprise  adjudication  by  courts  directed  at  compensation  for 
damages, restitution of unduly paid sums, invalidity of clauses in contracts. Some MSs include also 
a  criminal  facet  and  consider  UTPs  as  a  civil,  administrative,  and  criminal  infringements. 
Increasingly  judicial  enforcement  has  been  complemented  by  administrative  enforcement  with 
sanctioning powers,  including  fines and, to a limited extent, injunctions. Administrative enforcers 
include competition authorities, ministries of agriculture, agencies415. Often multiple administrative 
bodies in charge with enforcement powers are in place. Competition authorities are responsible both 
for unfair practices that constitute anticompetitive infringements and for non-competition aspects of 
UTPs when, for example, the infringer that engages in unfair practices is not in a dominant position. 
In  addition,  some  MSs  have  identified  other  administrative  authorities  complementing  the  former 
that either focus on the protection of SMEs in agriculture or deliver recommendations and opinions 
using  cooperative  rather  than  hierarchical  enforcement.  The  introduction  of  administrative 
enforcement  is  mostly  linked  to  the  adoption  of  dedicated  legislation  on  UTPs  in  supply  chains. 
Indeed,  in  all  MSs  adopting  such  legislation,  some  type  of  administrative  enforcement  has  been 
provided. Whereas in several cases existing authorities have been empowered (mainly Competition 
or  Consumer  and  Competition  Authorities),  in  other  cases  newly  dedicated  administrative 
authorities have been established. 

Table n. 6: MSs and main enforcing authorities 

MS 

MAIN ENFORCING AUTHORITY AS REGARDS UTP LEGISLATION  

AUSTRIA 

BULGARIA 
CROATIA 
CYPRUS 
CZECH REPUBLIC 

FRANCE 

GERMANY 

GREECE 
HUNGARY 
IRELAND 
ITALY 

Court  
(administrative authorities, e.g. Federal Competition Authority, have standing to start 
judicial proceedings) 
Commission of Protection of Competition (CPC) 
Competition Authority 
Commission for the Protection of Competition 
Office for the Protection of Competition 
Direction générale de la concurrence, de la consommation et de la répression des 
fraudes (DGCCRF, within the Min. Econ.) 
Competition Authority 
(although injunctions are imposed by courts; CA may file a request) 
Court 
National Food Chain Safety Office 
Competition and Consumer Protection Commission 
Competition Authority 

415 See Commission Report 2016 “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”. 

160 

 
 
 
 
                                                 
LATVIA 
LITHUANIA 
POLAND 
PORTUGAL 

ROMANIA 

SLOVAKIA 
SLOVENIA 

SPAIN 

UNITED KINGDOM 

Competition Council 
Competition Council 
Office of Competition and Consumer Protection 
ASAE (Autoridade Administrativa Nacional Especializada) 
Consumer Protection Authority and Ministry of Finance  
(depending on UTP) 
Ministry of Agriculture And Rural Development 
Slovenian Competition Protection Agency 
Administration of Aut. Comm. or General State Administration 
(depending on territorial dimension of UTPs:) 
Grocery Code Adjudicator 

MS HAVING LIMITED SCOPE LEGISLATION  
(MAINLY FOCUSED ON CONSUMER-TYPE MISLEADING AND AGGRESSIVE PRACTICES) 

BELGIUM 
DENMARK 
FINLAND  
SWEDEN 

Commercial Court 
Court 
Market Court 
Market Court 

Other  features  of  administrative  enforcement  concern  the  possibility  to  investigate  and  sanction 
multiple  infringements  with  multiple  injured  parties.  Administrative  enforcement  can  either  focus 
on  single  infringers  and  injured  or  on  multiple ones.  In  the  latter  case, the  effects  on  markets  are 
wider  and  deeper.  Administrative  unlike  judicial  enforcement  accounts  for  repeat  infringements. 
Sanctioning  power  can  be  adjusted  accordingly  when  the  infringer  has  previously  engaged  in  the 
same or similar unlawful conduct.  

Administrative  bodies  may  (1)  either  only  have  investigative  powers  and  refer  to  courts  for 
enforcement or (2) hold both investigative and sanctioning powers. When they can only investigate, 
they may bring actions before the court without prejudice of individual rights to effective judicial 
protection by the UTPs injured416. In the latter case, these powers have to be exercised by separate 
units or legal entities in order to comply with due process and good administration requirements.  

Complementarity  of  enforcement  mechanisms  include  also  private  regimes  that  can  either  be 
voluntary  or  mandatory,  characterized  by  the  extensive  use  of  market  and  reputational  sanctions 
The pillar of private bodies applying codes of conduct represents the third side of the triangle. This 
is  supported  at  EU  level  by  the  Food  Supply  chain  initiative  (FSCI)417.  Enforcement  of  codes  of 
practices may follow a different path. Compliance with codes of practice can be ensured by private 
bodies like the FSCI  platforms, by public  enforcers,  including administrative bodies (UK grocery 

416 See, for example, France where the DGCCM can start a civil action and seek judicial remedies including civil penalties 
(ammèndes civiles) (see code de commerce art. 442-6); for different UTPs the Competition Authority can impose 
administrative sanctions (see article 470-2 and 441-7, code de commerce).  See Ireland, where the Competition and 
Consumer Protection Commission monitors over compliance with the Regulations (also through the Annual Report 
delivered by enterprises, whereas criminal and civil courts adjudicate the criminal sanctions (criminal courts) and civil 
remedies (restitution and damages, civil courts). See also, for the UK, Draft Groceries Code Adjudicator Bill, sec. 36. “If 
the Adjudicator concludes that a large retailer has broken the Groceries Code it may make recommendations under clause 
8, require information to be published under clause 9 or impose financial penalties under clause 10 (but financial penalties 
may only be used if the Secretary of State has made an order allowing this – see also Schedule 3)”.  
417 See www.supplychaininitiative.eu 

161 

 
 
 
 
                                                 
adjudicator) and courts, and by hybrid bodies composed by members of public administration and 
representatives of the various interests involved like the Code oversight committee in Spain.  

What is the relative weight of each enforcement mechanisms? Why and how do they complement 
each  other?  No  legislation  imposes  alternative  routes.  Injured  parties  can  access  the  three 
enforcement mechanisms. The enforcement triangle, including judicial, administrative and  private 
resolution  mechanisms  represents  a  relative  common  feature  in  MSs.  What  sensibly  differs  is  the 
combination  and  modes  of  interaction.  Almost  no  national  legislation  coordinates  judicial  and 
administrative enforcement. Similarly, no effective coordination exists between the enforcers of the 
supply chain initiatives (SCI national platforms) and the judicial and administrative enforcers.  

The  relative  weight  of  each  enforcement  mechanism  has  changed  over  time.  Administrative 
enforcement has gained more relevance over adjudication. The rise of administrative enforcement 
can partly be explained by the (lack) of producers’ incentives and more generally of ‘victims’ to use 
the judicial system. In long term relationships characterized by economic dependence between the 
parties,  litigation  is  generally  the  end  and  farmers  might  not  afford  such  a  risk.  Administrative 
enforcement  with  ex  officio  power  shields  farmers  away  from  the  danger  of  retaliation  and  better 
preserve the continuation of the business relationship with large buyers.  

. The complementarity concerns both procedures and sanctions/remedies.  

Complementarity implies differences on approaches and on instruments. The resolution of private 
disputes  is  usually  characterized  by  a  strong(er)  collaborative  approach  between  enforcers  and 
parties.  Sanctions  are  limited  whereas  remedies  are  primarily  reputational  although  some  private 
adjudicator  can  also  issue  injunctions  and  fines.  Administrative  enforcement  features  both 
collaborative  and  hierarchical  enforcement  depending  on  the  approach.  Primary  instruments  to 
prevent  and  deter  are  fines  and  injunctions.  Adjudication  before  courts  follows  the  adversarial 
model and focuses on injunctions restitution, and compensation. 

The enforcement triangle 

Administrative 

Judicial 

(civil and criminal) 

Private (FSCI) 

The  three  pillars  constitute  the  enforcement  triangle  that  should  address  the  enforcement  gap  in 
UTPs. Their coordination at MSs level is currently very limited; lack of coordination together with 
some design fallacies undermine the effectiveness of decentralized enforcement calling for a better 
integrated  approach  both  at  MS  and  EU  level.  An  integrated  approach  requires  coordination 
between  enforcement  mechanisms  to  ensure  that  each  performs  its  functions  without  duplications 
and overlaps. But the most important feature is coordination among MSs both among administrative 

162 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
enforcers and between them and courts, criminal and civil. It is necessary to define a sequence, to 
regulate  the  legal  force  of  administrative  decisions  in  judicial  proceedings,  the  possibility  to  use 
evidence,  and  the  solution  of  potential  conflicts  between  final  decisions  in  each  enforcement 
mechanism. 

The operation of the enforcement triangle becomes even more problematic when multiple injurers 
and  multiple  injured  belonging  to  different  MSs  or  to  States  outside  EU  are  involved. 
Administrative  and  judicial  enforcement  have  different  rules  concerning  extraterritoriality.  Hence 
their complementarity when injured and infringers are located in different states may have different 
features from those related to UTPs whose geographic scope rests within a single MS. 

In case of trans-border infringements one of the open questions is the extent of national enforcers’ 
power to investigate and sanctions infringements that start from a foreign MS and have effects on 
their own or start from their own MS and have effects in other MSs 

Administrative enforcers can fine traders for UTPs whose effects are outside their MS. Some MSs 
specifically provide  for this  power  even  in  relation  to  outside  EU  producers (UK,  Ireland).  Other 
MSs  establish  a  principle  of  reciprocity  (Austria).  Accordingly,  protection  of  non-national 
producers is warranted as long as the same protection would be granted to national producers before 
the  foreign  administrative  authority.  Other  MSs  explicitly  circumscribe the  scope  of  protection to 
their  national  businesses  injured  by  UTPs  (Poland).    At  the  moment,  administrative  authorities 
normally  do  not  pursue  infringements  that  start  in  a  different  jurisdiction.  Hence,  e.g.,  under  the 
current  legislation  the  Italian  administrative  enforcer  can  enforce  infringements  committed  by 
Italian retailers against foreign producers but do not generally enforce infringements committed by 
foreign  retailers  against  Italian  producers.  It  is  generally  believed  that  infringements  should  be 
enforced  where  the  infringers  are  legally  established  or  where  the  decision  to  infringe  has  been 
made.  Additionally    even  if  they  order  a  fine  they  lack  executory  power  if  the  infringer  does  not 
pay.  

Judicial  enforcement  against  UTPs  becomes  problematic  when  there  are  multiple  infringers  and 
multiple injured  located in different MSs418. Whether a single law could be applicable to the same 
infringement or different laws should be applied depending on where the infringers are located is an 
open question. Even more problematic is the case when injured are partly located in EU MSs and 
partly outside of EU. Access to enforcement systems by non-EU producers follow different patterns 
in judicial and administrative enforcement. Some new legislation as that of UK has broadened the 
scope of enforcement beyond EU borders making it accessible also for non EU producers.  

IV) A. Administrative enforcement 

As shown in the table above (table n. 6), the most recent MSs legislation has introduced forms of 
administrative  enforcement  in  addition  to  judicial  enforcement  and  to  private  dispute  resolution 
mechanisms. It is an attempt to address the enforcement gap related to the very limited use of courts 
and  the  low  effectiveness  of  private  dispute  resolution  mechanisms.  It  is  partly  driven  by  the  so 

418 With special regard to applicable law, see S. Clavel in Renda - Cafaggi, Study on the legal framework covering 
business-to-business unfair trading practices in the retail supply chain, February 2014, p. 84 seq. 

163 

 
 
 
 
 
 
                                                 
called  ‘fear  factor’  that  prevents  farmers  from  using  courts  fearing  commercial  retaliation  with 
termination of the commercial relationship and forced exit from the chain. 

When  established,  administrative  authorities  generally  have  both  investigatory  and  sanctioning 
powers. However, in some cases the power to impose injunctions and/or sanctions is conferred to 
the court whilst the administrative authority only holds investigative power (Ireland) and the power 
to start the judicial procedure (e.g. France for practices under L-442-6, code de commerce). 

164 

 
 
 
 
 
TYPE OF 
ENFORCEMENT 

MS 

MAIN ENFORCING 
AUTHORITY 

INJUNCTIVE POWER 

POWER TO IMPOSE FINES 

Table n. 7: Enforcement, authorities and relative power 

ENFORCEMENT 
VIA COURTS 

AUSTRIA 

Court 

Court 
(Competition Authority, 
among other interested 
parties, may seek 
injunction) 
N/A 
Commission of 
Protection of 
Competition (CPC) 
N/A 
(CA may assess and 
accept voluntary 
commitments) 
Office for the 
Protection of 
Competition 
(CA may assess and 
accept voluntary 
commitments) 
Competition Authority 

Competition Council 
Office of Competition 
and Consumer 
Protection 
(may assess and accept 
voluntary commitments) 

GREECE 

BULGARIA 

Court 
Commission of 
Protection of 
Competition (CPC) 

CROATIA 

Competition Authority 

CZECH 
REPUBLIC 

Office for the 
Protection of 
Competition 

ITALY 
LATVIA 
LITHUANIA 

Competition Authority 
Competition Council 
Competition Council 

POLAND 

Office of Competition 
and Consumer 
Protection 

SLOVENIA 

Slovenian Competition 
Protection Agency 

ROMANIA 

Consumer Protection 
Authority 

HUNGARY 

National Food Chain 
Safety Office 

PORTUGAL 

ASAE (Autoridade 
Administrativa 
Nacional Especializada) 

UNITED 
KINGDOM 

Grocery Code 
Adjudicator 

National Food Chain 
Safety Office 
(at least for prohibition 
to use unfair terms) 

Grocery Code 
Adjudicator 
(may issue 
recommendations) 

ENFORCEMENT 
VIA 
COMPETITION 
AUTHORITIES 

ENFORCEMENT 
VIA CONSUMER 
PROTECTION 
AUTHORITY 

ENFORCEMENT 
VIA DEDICATED 
ENFORCING 
AUTHORITIES 

ENFORCEMENT 
VIA STATE OR 
LOCAL 
ADMINISTRATIO
N 

COMBINED 
ENFORCEMENT 
BETWEEN 

SLOVAKIA 

SPAIN 

CYPRUS 

Ministry of Agriculture 
and Rural Development 
Administration of 
Autonomous 
Communities or 
General State 
Administration 
Commission for The 
Protection of 
Competition 

165 

N/A 

Commission of Protection of 
Competition (CPC) 

Competition Authority 

Office for the Protection of 
Competition 

Competition Authority 
Competition Council 
Competition Council 

Office of Competition and 
Consumer Protection 

Slovenian Competition 
Protection Agency 

Consumer Protection 
Authority 

National Food Chain Safety 
Office 

ASAE (Autoridade 
Administrativa Nacional 
Especializada) 

Grocery Code Adjudicator 

Ministry of Agriculture And 
Rural Development 

Administration of 
Autonomous Communities or 
General State Administration 

Court 

Commission for the 
Protection of Competition 

 
 
 
 
 
 
 
 
 
 
 
 
TYPE OF 
ENFORCEMENT 
COURTS AND 
COMPETITION 
AUTHORITIES 

MS 

MAIN ENFORCING 
AUTHORITY 

INJUNCTIVE POWER 

POWER TO IMPOSE FINES 

FRANCE 

DGCCRF 
(Min. Econ) 

GERMANY 

Competition Authority 

IRELAND 

Competition and 
Consumer Protection 
Commission 

Court 
(art. 442-6, code de 
comm.) 
(Min. Ec. and CA, 
among other interested 
parties, may seek 
injunction) 
Court 
(CA may seek 
injunction) 

Competition Authority 
(art. 470-2, code de comm.) 

Competition Authority 

Court 

A.1. Investigative powers 

Administrative  enforcers  are  required  to  apply  rules  either  based  on  legislation  or  on  private 
regulation. Often, as it is the case in the UK, the enforcer solves disputes related to the application 
of a code of conduct. 

Limited resources and the necessity to identify priorities in tackling UTPs require strategic decision 
making  on  the  administrative  enforcer.  The  investigation  strategy  is  generally  determined  by  the 
enforcer  which  defines  priorities  and  scope  of  investigations.  In  some  legislation  priorities  are 
statutorily defined, in others they are determined on a case by case. Only a few countries like the 
UK have defined in the legislation criteria and priority setting to be followed, including the impact 
of  the  practice  and  the  effects  of  its  removal.  Administrative  enforcers  publish  an  annual  report 
where they specify their strategic priorities for the future and the past achievements419. 

Enforcers  use  primarily  inspections  but  can  also  promote  self-reporting  by  retailers  in  order  to 
reduce  asymmetry  of  information  and  save  costs.  Especially  those  enforcers  which  engage  into  a 
continuous dialogue with the infringers rely more on self-reporting and surveys than on individual 
inspections.  Collaborative  models  first  address  the  potential  infringer  and  ask  them  to  investigate 
and  report420.  If  the  investigation  is  inadequate  or  the  reported  infringement  does  not  stop,  the 
enforcer can switch to inspections and other more intrusive monitoring instruments moving from a 
cooperative to a command and control enforcement approach. 

During  investigations  enforcers  have  to  respect  procedural  rules  based  on  national  administrative 
laws and the right to good administration, a general principle recognised both at EU and MS level. 
Procedural  guarantees  for  the  potential  infringer  increase  at  the  enforcement  level  if  the 
administrative body decides that there are sufficient grounds to proceed. 

419 See for example in France DGCCRF that established each year a program for investigation (source: questionnaire based 
DG AGRI consultation of MS experts, October-November 2017). 
420 See the statutory review of the Grocery code adjudicator published in 2016 “GCA approach to investigations: 42. The 
Adjudicator has chosen to take a collaborative approach and describes a three-stage process that is designed to address and 
resolve issues quickly whilst retaining the option to move to an investigation if necessary. This process consists of:  
• Alerting large retailers when Code-related issues are raised with the Adjudicator by suppliers; • Requesting that the large 
retailer Code Compliance Officers (CCOs) internally look into the issues; and • Report back to the Adjudicator, identifying 
any business changes made to address the issue raised (if necessary).”. 

166 

 
 
 
 
 
                                                 
Most often enforcers can act ex officio or on the basis of parties’ complaints421. More specifically, in 
almost  all  MSs  UTPs  legislation  empowers  administrative  authorities  to  act  ex  officio422.  In  most 
MSs (see the table below) complaints can be anonymous in order to protect the complainants from 
retaliation.  Although  confidentiality  shall  be  balanced  with  the  effectiveness  of  investigation  and 
the  right  of  defence  of  potential  infringers423.  Many  administrative  enforcers  allow  anonymous 
complaints but preserve the discretionary power to start investigations.  

Table n. 8: Confidentiality of complaints lodged with administrative authorities and ex officio investigative 
powers in UTP examined legislation 

MS 

AUSTRIA 

BULGARIA 

CROATIA 

CYPRUS 

CZECH R. 

FRANCE 

GERMANY 

GREECE 

HUNGARY 

IRELAND 

ITALY 

LATVIA 

LITHUANIA 

POLAND 

PORTUGAL 

ROMANIA 

SLOVAKIA 

SLOVENIA 

SPAIN 

UNITED KINGDOM 

CONFIDENTIAL COMPLAINTS 

EX OFFICIO INVESTIGATIVE POWERS 

X 

X 

N/A 

N/A 

X 

X 

X 

N/A 

X 

X 

X 

X 

X 

X 

NO 

NO 

NO 

X 

X 

X 

No, but law provides standing of 
administrative authority and business 
organisations 
X 

X 

X 

X 

X 

X 

N/A 

X 

X 

X 

X 

X 

X 

X 

N/A 

X 

X 

X 

X 

421 See Commission Report p. 7: “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. 
422 The Austrian case would represent the only exception as shown by the data collected within the DG AGRI survey 
(2017). However, in this case, the Local Supply Act, sec. 14, vests associations representing business collective interests 
with the power to start proceedings before the Court for a cease and desist order.  
423 See e.g. in the Lithuanian law on the prohibition of unfair practices of retailers, art. 5.2: "Upon a reasoned request of a 
supplier who has submitted to the Competition Council the application specified in Article 8(1) of this Law and/or the 
documents and other information necessary for performing the functions of the Competition Council, the data identifying 
the supplier shall not be made public and disclosed." 

167 

 
 
 
 
                                                 
The  possibility  to  lodge  a  complaint  does  not  necessarily  imply  the  status  of  party  within  the 
administrative proceeding concerning the potential infringement. When no specific provisions exist 
national administrative laws determine  who can  lodge  a complaint and who can  be a party  to the 
proceeding. Among the parties which can lodge complaints before administrative authorities some 
MSs include also producers’ organizations and farmers’ associations, as shown in the table below. 
Moreover, in some MSs the producers’ organizations lodging the complaints can also participate in 
the proceedings (e.g. Hungary, Italy)424. Their role may be extremely useful to present the views of 
those  harmed  by  the  practices  which  generally  do  not  have  the  right  to  participate.  Examples 
include those presented in the table below. 

Table n. 9: Empowerment of enterprises’ associations in the administrative enforcement of UTP legislation 
(examples)  

MSS 

CYPRUS 

CZECH R. 

GERMANY 

HUNGARY 

ITALY 

POWER OF TRADE OR PROFESSIONAL ASSOCIATIONS TO 
LODGE COMPLAINTS FOR THE ENFORCEMENT OF UTP 
LEGISLATION BEFORE ADMINISTRATIVE AUTHORITIES 
(EXAMPLES) 
power to lodge complaints with the Competition 
Commission 
power to lodge complaints with the Competition 
Commission 
power to lodge complaints with the Federal Cartel Office 
power to be party to administrative proceedings for 
enforcement of UTP legislation, representing collective 
interests 
power to seek injunctions before the CA in representation 
of collective interests; power to lodge complaints and to 
intervene in investigation procedures 

In  some  models,  the  enforcer  engages  suppliers  and  meet  regularly  with  them  or  their 
representatives to learn about UTPs425.  

A.2. Enforcement stricto sensu 

Administrative enforcement includes a number of approaches from soft to hard. As we suggested in 
relation  to  investigation,  also  enforcement  stricto  sensu  can  include  both  a  collaborative  and 
hierarchical  approach.  The  former  tries  to  establish  a  cooperative  relationship  between  enforcers 
and infringers before and after the infringement when the consequences have to be removed. The 
latter  does  not  engage  the  infringer  before  and,  within  the  due  process  guarantees,  proceeds  with 
sanctions  and  injunctions  after  the  infringement  has  materialized.  The  collaborative  approach 
addresses both causes and consequences of the infringement. The hierarchical approach focuses on 
the consequences but does not address the causes. 

424 See for example section 5 of the Hungarian Act (2009): “(1) The professional organisation representing the interest of 
suppliers may assume the position of a client (melius party) in any administrative proceeding initiated for the violation of 
this Act.” (unofficial translation); Article 8, Italian Competition Authority Regulations on investigation procedures in the 
field of UTPs in agrifood contractual relationships: "Partecipazione all’istruttoria. 1. I soggetti portatori di interessi pubblici 
o privati, nonché i portatori di interessi diffusi costituiti in associazioni o comitati cui può derivare un pregiudizio dalle 
infrazioni oggetto dell'istruttoria hanno facoltà di intervenire nel procedimento in corso (...)".  
425 This is the case for the Grocery adjudicator in the UK where promotion of dialogue between suppliers and retailers is 
one of the main tasks. 

168 

 
 
 
 
 
                                                 
 Some MSs have legislatively defined general principles that should guide administrative authorities 
exercising sanctioning  powers  including  deterrence  or  dissuasiveness and proportionality (e.g. the 
UK).  In  other  MSs  the  specific  criteria  have  been  determined  by  the  competent  authority  in 
guidelines or similar soft law instruments (e.g. Ireland). 

MSs practices show that collaborative approaches may deliver better than conventional sanctioning 
regimes.  Often  the  different  tools  are  combined  and  scaled.  In  some  cases,  the  enforcer  can  first 
issue recommendations and advices and, if they are not followed, can exercise sanctioning powers. 
In  other  cases,  the  enforcer  can  only  sanction.  However  even  in  the  latter  case,  informally 
cooperative enforcement takes place at the stage of investigation. On the infringer side, there is also 
an  alternative  between  commitments  and  sanctioning,  an  alternative  which  is  normally  limited  to 
not  serious  infringements.  The  infringer  is  given  the  possibility  to  propose  commitments  and  the 
enforcer  has  discretionary  power  to (1)  accept  the  proposal without  declaring  the  infringement  or 
(2)  reject  the  proposal  and  move  to  the  sanctioning  stage  once  the  infringement  has  been 
ascertained. 

We  distinguish  between  enforcement  stricto  sensu  and  forms  of  public  dispute  resolutions 
mechanisms  that  include  negotiations.  Within  enforcement  we  encompass  conventional  command 
and  control  and  forms  of  cooperative  enforcement  where  there  is  joint  problem  solving  between 
enforcer and infringer but the latter preserves the power to accept or reject proposals made by the 
infringer. We do not include conciliation procedures promoted by administrative bodies. 

Administrative  enforcement  may  vary  according  to  practices  and  to  the  seriousness  of  the 
infringement.  Some  MSs  distinguish  between  major  and  minor  infringement  and  adapt  the 
sanctioning  policy  accordingly426.  Other  MSs  do  not  expressly  make  the  distinction  in  legislation 
but adopt it in practice by scaling the type and the amount of sanctions (in case of fines) according 
to the gravity of the violation (see table below n. 11). 

Some MSs distinguish the seriousness of infringements by ‘ranking’ practices and the sanctioning 
system  reflects  the  differences.  Infringement  of  certain  practices  entail  harder  sanctioning  than 
infringement of other unfair practices (see below § A.3.3 and table n. 11). 

When  UTP  legislation  has  been  specifically  adopted,  there  is  usually  at  least  one  administrative 
enforcer at MS level. Even when the enforcer is the competition authority it should be clarified that 
its power to act is not based on competition law but on specific legislation to contrast UTPs. Hence 
Competition authorities can pursue different routes against the same UTP with different units or a 
general  unit  can  investigate  both  the  competition  and  the  non-competition  facets  of  the 
infringement. When no specific legislation on UTPs exists Competition Authorities can only verify 
and sanction anticompetitive aspects while the other aspects are left to adjudication before courts. 
Sometimes an additional enforcer is identified to focus on specific questions, related for example to 
SMES’ protection.  

The  administrative  enforcer  follows  an  administrative  procedure  where  they  perform  both 
investigation and adjudication. The two phases are procedurally distinguished in order to guarantee 
due  process  rights.  It  must  be  avoided  that  the  same  entity  investigates  and  decides  over  its  own 
investigation.  This  separation  can  be  (1)  structural,  when  two  different  bodies  are  in  charge  of 
investigation and adjudication or (2) functional, where within the same entity two separate units are 

426 See Spain Ley, as examined below, § IV.A.3.  

169 

 
 
 
                                                 
in charge. Procedural guarantees include right to be informed, to be heard, right of defence, right to 
appeal. The procedure ends with an administrative decision that can be appealed before a court. 

A.3. The correlation between practices and sanctions  

Sometimes, legislations provide different types of enforcement depending on the type of practices. 
E.g. in France, restrictive practices addressed by art. 442-6, code de comm., are subject to judicial 
injunctions  and  ammendes  civile,  whereas  other  practices,  e.g.  in  the  area  of  payment  delays  or 
negotiation  of  distribution  contracts  (art.  441-7,  441-8,  code  de  comm.),  are  subject  to 
administrative fines by administrative authorities.    

Moreover,  not  all  the  practices  are  equally  serious  violations.  Some  MS  like  Spain  explicitly 
determines the seriousness of the violation in relation to the specific practice. E.g., under Spanish 
law, violation of the written form of a contract constitutes a minor infringement, whereas delay of 
payment  constitutes  a  serious  infringement.  The  legislative  technique  usually  deployed  is  the 
distinction between major and minor or serious and non-serious infringements. When the legislator 
does  not  explicitly  make  these  differences,  the  enforcer  exercising  discretion  can  use  the  general 
principle like proportionality and deterrence to distinguish among practices and define some kind of 
hierarchy.  

Table n. 10: Examples of correlation between practices and fines 

COUNTRIES 

PRACTICES/FINES 

CROATIA 

FRANCE 

ITALY 

SPAIN 

Depending on the gravity and the significance of the infringement the UTPs Act recognises fines 
for most serious infringements, serious infringements, for minor and other infringements. 
Most serious infringements:  

- 
- 

up to 662.556,81 eur equivalent (legal persons) 
331.278,41 eur equivalent (physical persons) 

Lower caps for serious and minor infringements 
Administrative fines (infringements of art. L441-7,8, retail contracts) 
Ammende civile (infringements of art. L 442-6, restrictive practices) 
Different fines depending on UTP (contracts v. practices v. payment delay/practices) 
Infringements concerning the use of written form for agrifood contracts and the contents 
requirements of such contracts: 1.000 – 40.000  
UTPs during execution and in case of unfair termination: 2.000 - 50.000 eur 
Violation of payment terms: 500 – 500.000 eur 
Distinction between minor and serious offenses is based on type of UTPs. 
3000 eur (minor offenses)   
1.000.000 eur (very serious offenses) 
100.000 eur (serious offenses) 
Examples of minor food procurement contracting infringements: failure to draw up a written 
food procurement contract as specified in the specific legislation; introducing changes in the 
terms of the contract that were explicitly agreed by the parties; f) requiring additional payments 
over the price agreed in the contract, except in the cases provided for in this law. 
Example of serious infringements: failure to comply with payment periods in commercial 
transactions involving food or food products. 
Repeat infringements. Two or more minor offences within two years as from the date of issue of 
the final administrative decision of the first one: a serious offence. Two or more serious offences 
within two years as from the date of issue of the final administrative decision of the first one: a 
very serious offence.  

A.3. Commitments, Recommendations, and sanctions 

170 

 
 
 
 
 
Following  a  consolidated  trend  in  administrative  enforcement,  some  new  legislations  provide  the 
infringer  with  the  possibility  to  voluntarily  cease  the  infringement  and  make  whole  of  the 
infringement’s consequences. The possibility to undertake commitments is generally associated to 
the (low) gravity of the violation and it is an alternative to sanctions.  In some MSs the infringers 
can  submit  a  proposal  to  be  accepted  or  rejected  by  the  enforcer  (Croatia,  Hungary).  When  the 
infringement is serious, commitments may not be allowed and the enforcer issues both a fine and an 
injunction.  In  other  MSs  the  enforcer  issues  recommendations  which  are  not  legally  binding. 
Following  the  recommendation  the  infringer  submits  an  action  plan  whose  implementation  is 
monitored  by  the  enforcer427.  If  the  action  plan  is  not  complied  with  the  enforcer  can  move  to 
conventional enforcement practice and order a sanction. 

3.1) Commitments 

Commitments represent a cooperative approach to enforcement. They can result in an undertaking 
to  cease  and  desist  from  the  violation  and  to  remove  the  consequences  of  the  infringement. 
Commitments  may  be  offered  by  the  infringer  and  evaluated  by  the  enforcer  that  can  accept  or 
reject  them  if  they  seem  inadequate428.  Commitments  can  be  part  of  an  agreement  between  the 
authority  and  the  infringer  that  is  legally  binding  and  judicially  enforceable.  However,  the 
incentives to comply are related to the possibility of scaling up to sanctions by the administrative 
authority.  Indeed,  commitments  are  often  backed  by  conditional  fines  or  astreintes  (for  example 
provided by Polish legislation). 

One  of  the  open  questions  concerns  the  effects  of  commitments  on  the  injured  party.  Especially 
when  commitments  become  binding  can  the  ‘victim’  of  the  infringement  bring  a  civil  action  for 
failure to comply with the commitments or does the implementation of the commitment remain an 
issue between the administrative enforcer and the infringer? The answer to this question depends on 
whether  national  legal  systems  qualify  the  binding  agreement  with  the  commitment  as  an 
enforceable agreement or even a contract and whether the third party beneficiary doctrine applies. If 
the agreement can be considered as a third party beneficiary contract, the victim should be able to 
sue for the breach of the commitment before a civil court. On the one hand this effect can provide 
additional incentives to the infringer and increase monitoring by the parties who suffer harm in case 
of non-compliance. On the other hand, the infringer may consider this too high a burden and decide 
not to propose the commitment in the first place. If the agreement is not a third party beneficiary 
contract enforcement is left exclusively to the administrative enforcer. 

427 This is the model of the Grocery Adjudicator in the UK. 
428 See for example the Croatian legislation “Within the investigation the CCA decides whether the proposed measures are 
sufficient for the elimination of the UTPs, taking into account the gravity, scope and the duration of the infringement. 
If the CCA finds the proposed commitments acceptable and sufficient for the elimination of the UTPs, it issues an interim 
decision  on  the  basis  of  which  these  commitments  become  binding  for  the  party  that  must  provide  evidence  on  the 
fulfilment  of  these  measures  within  a  prescribed  deadline.  Where  the  party  submits  this  evidence,  the  CCA  decides  to 
terminate the proceeding without establishing the infringement of the rules concerned and without imposing any sanctions.” 
A  similar  provision  is  in  the  Hungarian  Act.  Section  8.1  states:  “(1)  If,  prior  to  the  adoption  of  a  resolution  by  the 
agricultural administrative authority on the merits of the case, the trader affected undertakes in writing to align its conduct 
to  the  provisions  of  this  Act  in  a  set  manner,  and  public  interest  can  be  served  this  way,  the  agricultural  administrative 
authority may adopt an order that renders the performance of the undertaking obligatory, simultaneously terminating the 
proceeding,  ordering  the  trader  to  pay  the  procedural  costs,  without  including  the  establishment  of  infringement  or  non-
infringement in the order.” 

171 

 
 
 
                                                 
 
 
 
Clearly, even if the commitments produce no direct effects on the victim, failure to comply may be 
taken into account by the civil court when compensation and or restitution is sought by the injured 
party. 

3.2) Recommendations 

In  this  model  (UK)  the  enforcer  makes  (not  legally  binding)  recommendations  at  the  end  of  the 
investigation.  Compliance  with  recommendations  is  driven  by  persuasion  rather  than  by  legal 
authority. The Grocery Code Adjudicator (GCA) after investigation can decide to issue a report and 
make recommendations or use its sanctioning power429. It generally follows a scaling strategy and 
issues recommendations asking the infringer to report on the progress.  

A  similar  model  is  used  in  France,  where  a  Commission  for  unfair  trade  practices  (Commission 
pour pratiques deloyales) issues non-legally binding opinions (avis), that are generally followed by 
the courts. The difference with commitments is that the recommendations are usually issued by the 
‘enforcer’ whereas commitments are usually submitted by the infringer and accepted or rejected by 
the  Administrative  body.  Not  only  Recommendations  concern  the  substantive  part  e.g.  what 
constitutes a UTP but can also deal with the remedial side. The French Commission for unfair trade 
practices  has  for  example  explicitly  stated  that  it  is  possible  to  combine  injunctive  relief  and 
invalidity430. The Cour de Cassation in France makes references to the opinion of the Commission 
when deciding about remedies related to UTPs.  

3.3) Sanctions 

The  new  legislation  regulating  UTPs  introduces  administrative  sanctions.  All  include  financial 
penalties in the form of fines. Some add also injunctions and declaratory decisions. Damages and 
restitution are instead usually left to judicial enforcement.  

3.3.1  Within  fines,  variations  in  legislations  are  remarkable.  Most  MSs  have  determined  both  a 
minimum and a maximum. Some only a maximum. At times the maximum can be alternatively the 
lower sum between a threshold and the amount of revenues431.  

429 See, for example, the case of TESCO which was found in breach of the Code 
“ £ Tesco had breached paragraph 5 of the Code by:   
• failing to rectify data input errors, or pay money owed to suppliers as a result of those errors, within a reasonable time; • 
failing to reimburse suppliers within a reasonable time for duplicate invoices containing deductions for promotional 
activities; • using money owed to suppliers as leverage in negotiations on future agreements or promotions;  • seeking 
deferral of payments to suppliers, or otherwise delaying payment, in order to maintain margin targets; and • making 
unilateral deductions from money owed to suppliers, including in respect of: o historic underpayments made by suppliers as 
a result of invoicing errors or omissions, which were identified by forensic audits instructed by Tesco – the GCA found that 
it was unreasonable to make unilateral deductions for historic claims; o unilaterally imposing charges for alleged supplier 
failures to fulfil orders or achieve service level targets, and then unreasonably delaying both in resolving supplier 
challenges to those charges and in repaying the money; o charging promotional fixed costs (gate fees), even though the 
promotion did not take place – the GCA found that any failure to promptly refund such charges was unreasonable.  
It was also unfair and unreasonable not to fully engage in attempting to resolve supplier concerns before making unilateral 
deductions from payments owed to them.” 
430 See CEPC, avis n° 14-02, 13 févr. 2014, holding that, when a UTP consists in an unfair clause the injured party can 
seek both an injunctive relief and the nullity of the specific clause. 
431 See for example section 6 of the Hungarian Act on the prohibition of unfair distributor conduct vis-à-vis suppliers 
regarding agricultural and food industry products. Section 6.2 states “(2) The minimum amount of the product path 
supervisory fine is one hundred thousand Hungarian forints, while its maximum amounts to five hundred million 

172 

 
 
 
                                                 
 
When  infringers  do  not  comply  with  the  administrative  orders  to  cease  the  UTP,  they  can  be 
charged  with  additional  fines  for  non-compliance.  The  amount  of  these  fines  varies  quite 
significantly. In some cases, it is a daily sum for each day of non-compliance, in other cases it is a 
lump sum. 

Hungarian forints; however, it may not exceed ten percent of the net revenue attained by the trader in the business year 
preceding the issue of the resolution that establishes the violation”. 

173 

 
 
 
 
 
                                                                                                                                                                       
Table n. 11: Minimum and maximum threshold for the imposition of fines (examined UTP legislation)  

MINIMUM/MAXIMUM/NO 
THRESHOLDS 

MIN P.S. 

MAX P.S. 

% 
TURNOVER 

MS 

AUSTRIA 

PECUNIARY 
SANCTIONS 
Infringements 
of §§1-4, Local 
Supply Act are 
addressed only 
resorting to 
civil remedies 
(injunctions, 
damages) 

BULGARIA 

X 

Minimum/maximum 
thresholds 

5000 eur 

Up to 10% 
(t.o. of the 
product 
concerned) 

Up to 10% 

Up to 10% 

25.000 eur 
(in case 
turnover is 0) 

Most serious 
infringements: 
up to 
662556,81 eur 
(legal persons) 
331278,41 eur 
(physical 
persons) 
Lower caps 
for serious and 
minor 
infringements 

39.141.000 
eur 
Admin. fines: 
75.000 eur 
(individuals) 
375.000 
(entities) 

Civil sanctions 
(ammèndes 
civiles): 
5 million eur 

1mln eur 

Up to 10% 

50.000 eur 

N/A 

318 eur 

1.591.000 eur  Up to 10% 

3000 eur 

100.000 eur 

2000 eur 
(500 for 
payment 
delay) 
70 eur 

50.000 eur 
(500.000 for 
payment 
delay) 

Up to 0,2% 

CROATIA 

X 

Only maximum threshold 

CYPRUS 
CZECH 
REPUBLIC 

X 

X 

Only maximum threshold 
Only maximum 
thresholds 

X 
Administrative 
fines 
(infringements 
of art. L441-
7,8) 
Ammende 
civile 
(infringements 
of art. L 442-6) 

X 

N/A 

X 

X 
(criminal) 

X 

X 

Only maximum 
thresholds 

Only maximum 
thresholds 
Only maximum 
thresholds 
Minimum/maximum 
thresholds 
Minimum/maximum 
thresholds 

Minimum/maximum 
thresholds 

Minimum/maximum 

174 

FRANCE 

GERMANY 

GREECE 

HUNGARY 

IRELAND 

ITALY 

LATVIA 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MS 

LITHUANIA 

POLAND 

PECUNIARY 
SANCTIONS 

X 
X 
(to the entity 
and to 
managers) 

MINIMUM/MAXIMUM/NO 
THRESHOLDS 
thresholds 
Only maximum threshold 

MIN P.S. 

MAX P.S. 

120.000 eur 

% 
TURNOVER 
of net t.o. 

Up to 3% 

PORTUGAL 

X 

Minimum/maximum 
thresholds 

- € 250 for 
natural 
person 
- € 500 for 
micro 
enterprises 
-€ 750 for 
small 
enterprises 
-€ 1000 
for 
medium 
enterprises 
- € 2.500 
for large 
enterprises 

- € 20.000 for 
natural person 
- € 50.000 for 
micro 
enterprises 
-€ 150.000 for 
small 
enterprises 
-€ 450.000 for 
medium 
enterprises 
- € 2,5 mln for 
large 
enterprises 

X 
(criminal 
sanctions 
imposed by 
Consumer 
Protection 
Authority) 

X 

X 

X 

X 

ROMANIA 

SLOVAKIA 

SLOVENIA 

SPAIN 

UNITED 
KINGDOM 

Minimum/maximum 
thresholds 

10.756,15 
eur 

21.512,31 eur 

Minimum/maximum 
thresholds 
Minimum/maximum 
thresholds 

1000 eur 

300.000 eur 

6.000 eur 

18.000 eur 

Minimum/maximum 
threshold 

3000 eur 
(minor 
offenses) 

1.000.000 eur 
(very serious 
offenses) 
100.000 eur 
(serious 
offenses) 

Only maximum threshold 

1% of t.o. 
in UK 

As the table suggests the variations within fining rules are remarkable. Not only there is a difference 
between MSs that only define maximum and those that also define a minimum but also the amount 
varies  from  18.000  (Slovenia)  to  2.500.000.00  euro  (Portugal).  When  the  maximum  is  high 
variations occur within the national system and often the sanctioning criteria are not very detailed. 
These variations both within and between MS depend on the gravity of the infringements and on the 
characteristics of the infringer. Different approaches concern the link between sanctioning and the 
status of the infringer. In most MSs no direct and specific relevance seems to be attributed to the 
victim’s  status  (e.g.  it  does  not  matter,  when  establishing  the  amount,  if  the  victim  is  a  medium, 
small or a micro enterprise). In some MSs for the same UTP the amount of a fine can be higher for 

175 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
a  large  than  a  medium  or  a  small  enterprise432.  Clearly  the  status  is  relevant  when  the  legislation 
only applies to protect micro enterprises or it excludes cooperatives The amount of the fine can vary 
according to the number and size of the producers affected when the consequences of the UTP on 
the market are taken into account433.  

In some MSs fines are related to the infringer’s turnover, normally as a reference for the maximum 
amount of fines (BG, CY, CZ, DE, HU, LV, PL, UK). In other MSs, fines are related to the benefits 
accrued  for  engaging  into  the  UTPs  (e.g.  in  Italy434).  Some  MSs  (Croatia,  France,  Portugal) 
distinguish between natural and legal persons and define the maximum amount accordingly (higher 
for  legal  than  for  natural  persons)435.  More  rarely,  it  is  explicitly  linked  to  the  magnitude  of 
consequences and the impact on the fairness along the chain or the market. References are made to 
the effects of the practice on the market in relation to fairness and competitiveness which allow to 
capture the economic impact of the UTPs. In some cases, sanctioning is correlated to the gravity of 
the infringement based on the distinction between minor and major or serious offences436. In some 
countries, the amount is not only determined by reference to the seriousness of the infringement but 
also to the conduct of the infringer after the infringement and its availability to voluntary stop the 

432 See the Portuguese DL no. 166/2013. 
433 See e.g. Article 25, Spanish law no. 12/2013, on the scale of penalties, according to which penalties shall be scaled 
mainly on the basis of the degree of intentionality or the nature of the damage caused. 
434  See  Italy  “art.  62.  6.  Salvo  che  il  fatto  costituisca  reato,  il  contraente,  ad  eccezione  del  consumatore  finale,  che 
contravviene agli obblighi di cui al comma 2 e' punito con la sanzione amministrativa pecuniaria da euro 2.000,00 a euro 
50.000,00.  La  misura  della  sanzione  e'  determinata  facendo  riferimento  al  beneficio  ricevuto  dal  soggetto  che  non  ha 
rispettato i divieti di cui al comma 2 (7).” 
435  See  Croatian  Legislation  “The  cap  amount  of  the  fine  for  a  most  serious  infringement  may  amount  to  up  to  HRK  5 
million for a legal person and HRK 2.5 million for a natural person, where a legal or a natural person is a buyer and/or 
processor or re-seller within the meaning of the UTPs Act and sells the product under the price which is lower than any 
other purchase price in the product purchase chain, as referred to in Article 12 item 14 of the UTPs Act.” 
436 See. e.g., the Spanish Law 12/2013, of 2 August, measures to improve the functioning of the food supply chain. Article 
23. Infringements with regard to food procurement contracting. 1. The following are minor food procurement 
contracting infringements: a) Failure to draw up a written food procurement contract as specified in this Act. b) Failure to 
include at least the minimum required details in the food procurement contract. c) Failure to meet the conditions and 
requirements applicable to electronic auctions. d) Failure to keep obligatory documents on file. e) Introduce changes in the 
terms of the contract that were explicitly agreed by the parties. f) Require additional payments over the price agreed in the 
contract, except in the cases provided for in this law. g) Require or disclose sensitive commercial information from other 
operators obtained in the negotiation process or implementation of a food procurement contract, breach of confidentiality 
and the use of said information for purposes other than those expressly agreed in the contract. h) Failure to comply with the 
obligation to provide the information that is required by the competent authorities in the exercise of their duties. 2. The 
commission of two or more minor offences within two years as from the date of issue of the final administrative decision of 
the first one is considered a serious offence. Failure to comply with payment periods in commercial transactions involving 
food or food products is considered a serious offence in accordance with Law 15/2010 of 5 July 2010, amending Law 
3/2004 of 29 December 2004 establishing measures to combat late payment in commercial transactions. 3. The commission 
of two or more serious offences within two years as from the date of issue of the final administrative decision of the first 
one is considered a very serious offence.” 

176 

 
 
 
                                                 
unlawful conduct and remove the consequences437. The nature of the sanctions and the amount in 
case of fines vary depending on whether the infringer is a repeat infringer (e.g. Greece, Spain).  

There  is  not  a  reliable  study  concerning  fining  practices  but  the  anecdotal  evidence  suggests  that 
strong  variations  occur  across  MSs.  These  variations  are  also  correlated  with  different 
interpretations of the principle of proportionality that informs the exercise of sanctioning power by 
administrative authorities. These principles and its different applications across MSs also relate to 
the relation between penalties and corrective remedies when provided438. 

Sanctions’  effectiveness  may  be  complemented  by  publication  of  the  administrative  decision439. 
When  legislation  explicitly  provides  so,  a  balance  between  the  punitive/deterrent  function  of 
publication and procedural guarantees for the sanctioned party is ensured, e.g. by giving evidence 
on judicial review and revocation440.  

On the effectiveness of fines and financial penalties in the agri-food there is no clear evidence. The 
complementarity approach suggests that they might be necessary but are not sufficient to deter and 
to  compensate.  The  reputational  sanctions  might  have  as  significant  a  deterrent  effect,  especially 
when issued against retailers affected by consumers’ behaviour. This happens when they are public 
and reach a wide number of consumers. 

437 See under the Polish law: “In fixing the amount of the fines imposed in accordance with paragraph 1, paragraph 1, 
the President of the Office shall take into account attenuating or aggravating circumstances in the case. 

Examples of mitigating circumstances referred to in paragraph 2, are in particular: 
voluntary removal of effects of the infringement; 
failure by the supplier or buyer, on its own initiative, the practice of using the contractual advantage 

2. 
1) 
2) 
unfairly before proceedings are instituted or immediately after its initiation; 
3) 
4) 
to a rapid and smooth conduct of proceedings. 
3. 
infringement and a previous similar infringement.” 

on its own initiative to take action to stop the infringement or remedy the effects thereof; 
working together, the President of the Office in the course of proceedings, in particular to contribute 

Aggravating  circumstances  referred  to  in  paragraph  2  shall  be  the  intentional  nature  of  the 

438 See. e.g., Draft Groceries Code Adjudicator Bill, Schedule 3: Order conferring power to impose financial penalties 
79. The Government considers that financial penalties may not be necessary in order to secure a high level of compliance 
with the Groceries Code by large retailers.  
80.The Secretary of State would need to authorise financial penalties by order under clause 10, approved by each House of 
Parliament (see clause 24). 
81.Under paragraph 1 of Schedule 3, the Secretary of State could only make an order if, following consultation under 
paragraph 6, he or she thought the Adjudicator’s other powers (including recommendations and requirements to publish) 
were inadequate. The order would need to specify the maximum penalty that could be imposed or how to calculate the 
maximum: for example, by reference to the retailer’s groceries turnover or the value of relevant supply  
arrangements. The order could also require the Adjudicator to publish guidance about the criteria the Adjudicator intends to 
adopt in deciding the amount of a financial penalty. By delaying and leaving open the question of whether financial 
penalties are needed, clause 10 and Schedule 3 allow the Secretary of State to take into account the history of enforcement 
of the Groceries Code by the Adjudicator, together with the views of those affected. 
439 See § A.6 below and the table therein provided. 
440 See e.g. art. 6(8), Hungarian Law XCV 2009: “(8) The name (company name) and address (registered office) of the 
trader that assumed unfair distributor conduct, the infringement established, the amount of fine imposed and, if the 
resolution is revoked, this fact, the fact that the judicial review proceeding has commenced, the content of the final 
judgment, and the resolution that makes the undertaking as per section 8 (1) obligatory shall be published by the 
agricultural administrative authority on its website and by the Minister responsible for agricultural policy in the Ministry’s 
official gazette and on its website. The data shall be removed from the website two years after the final establishment of the 
violation and they cannot be published again following this date.”. For more examples see § A.6 below and the table 
therein provided.  

177 

 
 
 
                                                 
A.4. Administrative injunctions 

Together  with  fines  administrative  enforcers  can  also  issue  injunctions  prohibiting  the  unfair 
practice  and  ordering  the  removal  of  the  consequences.  Injunctive  powers  are  often  explicitly 
conferred to administrative authorities (e.g. Bulgaria, Czech Republic, Italy, Lithuania), sometimes 
only to courts (Cyprus), though on the basis of requests filed by administrative authorities or other 
eligible  entities  (Austria,  France,  Germany).  Depending  on  national  procedural  laws,  courts  may 
order injunctive relief on the basis of general administrative rules. 

Injunctions  may  be  prohibitory  and  or  affirmative,  with  orders  to  modify  the  current  practices. 
Unfair practices are about transferring costs and risks along the chain. While unlawful cost transfer 
may  be  tackled  by  monetary  transfers,  unfair  distribution  of  risks  may  require  more  structural 
intervention in the organization of the supply chain. This is the case for perishable goods where the 
issue related to disposal includes significant organizational changes both in the suppliers’ side and 
in  the  retailers’  side.  This  is  an  issue  that  touches  on  the  broader  question  related  to  waste 
disposal441. Cost and risk transfers can both be addressed by injunction but with different content. 
Prohibition of clauses transferring costs have to be combined with astreintes and restitution if the 
injunction is not complied with. Risk transfer may force organizational changes in the chain. The 
injunction  not  only  should  prohibit  the  transfer  but  also  force  organizational  changes  that  can 
prevent such transfer in the future. 

The practice of enforcement suggests that both at the investigation level and the sanctioning stage 
the scope remains relatively  limited and a thorough analysis of the effects  along the chain by the 
enforcer is missing. Indeed, administrative authorities still focus on the impact of UTPs on single 
producers without engaging into an analysis of the effects along the chain. 

441 See European Parliament Resolution 2017. 

178 

 
 
 
                                                 
A.5. The boundaries between administrative and criminal sanctions and the principle of ne bis 
in idem 

For  the  most  part,  the  MSs  legislation  has  introduced  administrative  sanctions  and  conferred 
enforcement power to existing or, in some cases, new authorities. This leaves open the issue of the 
possible  criminal  nature  of  the  administrative  sanctions  and  the  ensuing  question  about  ne  bis  in 
idem, e.g. whether criminal sanctions can be combined with administrative sanctions. A prominent 
exception  is  Ireland,  where  the  UTPs  are  considered  criminal  offences  and  the  sanctions  are 
criminal.  In  the  Irish  case  the  Competition  and  Consumer  Authority  can  issue  a  decision  with 
findings  concerning  the  UTP  but  it  has  to  refer  the  case  to  the  criminal  court  that  can  order  the 
criminal sanction442. The qualification of UTP as a criminal offence is featured in other MSs (e.g. 
Romania and Austria). 

In  other  MSs,  serious  infringements  may  also  constitute  criminal  offences.  Depending  on  the 
gravity  of  the  practice  it  can  be  qualified  as  criminal  or  administrative.  MSs  seem  in  this  case  to 
encompass various sanctions including administrative fines and convictions (e.g. Ireland). When the 
same offence can have both an administrative and a criminal facet the administrative enforcer has to 
take into account the administrative sanction. In the case of a fine the enforcer should discount the 
amount  paid  under  the  criminal  proceeding  from  the  total  if  that  is  higher.  Otherwise  no 
administrative fine could be ordered. Whether ancillary administrative sanctions can be ordered in 
addition to criminal ones varies. 

A.6. Reputational sanctions via administrative enforcement 

It is generally believed that reputational sanctions associated with market consequences like black 
list  are  generally  the  domain  of  private  regulation  and  enforcement  by  private  actors.  However 
administrative enforcers are considering the possibility of using reputational sanction in addition to 
the more conventional array. In particular, the reputational sanction may consist in the publication 
of the administrative decision. 

442 See CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016 S.I. 
NO. 35 OF 201 “ 
This Regulation sets out the provisions of the overall Regulations that will be treated as penal provisions for enforcement 
purposes. Breach of the cited provisions (including failure to comply with any contravention notice issued by the CCPC 
under the Consumer Protection Act 2007) may result in prosecution, either by summary or indictment with potential 
penalties as follows:   
(1) A person guilty of an offence is liable on summary conviction to the following fines and penalties:  
(a) on a first summary conviction for any such offence, to a fine not exceeding €3,000 or imprisonment for a term not 
exceeding 6 months or both;  
(b) on any subsequent summary conviction for the same offence to a fine not exceeding €5,000 or imprisonment for a term 
not exceeding 12 months or both.  
(2) If, after being convicted of an offence, the person referred to in subsection (1) continues to contravene the requirement 
or prohibition to which the offence relates, the person is guilty of a further offence on each day that the contravention 
continues and for each such offence is liable on summary conviction to a fine not exceeding €500.  
 (3) A person guilty of an offence is liable on conviction on indictment to the following fines and penalties:  
(a) on a first conviction on indictment for any such offence, to a fine not exceeding €60,000 or imprisonment for a term not 
exceeding 18 months or both;  
(b) on any subsequent conviction on indictment for the same offence to a fine not exceeding €100,000 or imprisonment for 
a term not exceeding 24 months or both. 

179 

 
 
 
 
                                                 
A  similar  effect  is  attained  through  the  publication  of  decisions  by  enforcing  authorities,  as 
addressed in the table below. 

180 

 
 
 
Table n. 11-bis: Publication of enforcement decisions administrative authorities 

Summary information (examples, not necessary exhaustive) 

MS 

BULGARIA 

CROATIA 

CYPRUS 

CZECH R. 

FRANCE 
ITALY 
LITHUANIA 
POLAND 
SPAIN 
UNITED KINGDOM 

PUBLICATION OF 
ADMINISTRATIVE AUTHORITY’S 
DECISIONS ON UTP 
ENFORCEMENT 
X 

X 

X 
X 

X 
X 

HIGHLIGHT IN ADMINISTRATIVE 
AUTHORITY ANNUAL REPORT 
OR WEBPAGE 

X 
(de facto – no legislative reference 
available) 

X 
(de facto – no legislative reference 
available) 

X 
X 

A.7. The practices of administrative enforcement in MSs 

The  practice  of  administrative  enforcement  depends  upon  national  administrative  substantive  and 
procedural  laws  which  significantly  differ443.  As  it  was  shown  in  the  previous  tables,  significant 
variations across MSs within administrative enforcement not only concern the ‘if’ (e.g. the number 
of investigations) but also the outcome of the enforcement action (type and intensity of sanctions). 
These  divergences  are  partly  determined  by  the  legislative  frameworks  and  partly  related  to  the 
approach taken by individual enforcers. Divergences in practices may occur even when legislation 
is similar.  

The European Commission reported a significant variation across MS about the practices evaluated 
through  the number  of  investigations.  It  stated: “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 years (AT, BG, FI, HR, LV, RO, SI); another 
third just investigated a few cases (CY, DE, IE, LT, UK); and the remaining third dealt with dozens 
or  even  more  (CZ,  ES,  FR,  HU,  IT,  PT,  SK).  To  some  extent,  this  could  be  attributed  to  the 
different salience of the problem in the different Member States.”444  

More recent data suggest that no relevant changes have occurred since the EC Report was written 
(see table below). Indeed, most of the MSs where the case rate is still low, if ever available, have 

443 See Parliament Resolution, A regulation for an open, efficient and independent European Union Administration, 
European Parliament Resolution of 9 June 2016 (2016/2610(RSP)). 
444 See Commission Report p. 7. 

181 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
adopted legislation very recently (e.g. Ireland, Croatia) or are still relying on limited scope existing 
legislation  (e.g.  Austria,  Finland)  and  some  of  them  are  considering  the  adoption  of  new  more 
focused legislation (e.g. Finland).    

Table n. 12: Enforcement practices during 2015-2016 

NUMBER OF 
COMPLAINTS 
(2015 -2016) 

6 

8 

N/A 
0 

22 

NUMBER OF 
COMPLAINTS 
RESULTING IN 
FURTHER 
ACTION AFTER 
COMPLAINTS 
6 

8 

N/A 
0 

18 

MS 

AUSTRIA 

BULGARIA 

CROATIA 
CYPRUS 

CZECH 
RUPUBLIC 

FRANCE 

595 (2015), 
494 (2016) 

GERMANY 

GREECE 

HUNGARY 

IRELAND 
LATVIA 
LITHUANIA 
POLAND 

PORTUGAL 

ROMANIA 

SLOVAKIA 

SLOVENIA 

SPAIN 

SWEDEN 

UK 

10 

N/A 

41 

Few cases 

N/A 

41 

0 
2 
0 
0 
80 (2015), 46 
(2016) 
0 

0 
2 
0 
0 
26 (2015)  20 
(2016) 
0 

9 

N/A 

98 

0 
- 0 request for 
arbitration 

9 

N/A 

98 

0 

0 

INVESTIGATION 
CONDUCTED BY 
ENFORCEMENT 
BODIES (2015-
2016) 

6 

8 

N/A 
0 

31 

2015: 36 
national, 25 
regional; 2016: 
32 national, 20 
regional; 2016 

1 

N/A 

152 

0 
2 
1 
0 
2 (2015) 
2 (2016) 
0 

39 

0 

1784 

0 

1 

182 

RESULTS OF INVESTIGATION / 
PROCEEDINGS 

Fines 
- 5 pending investigations 
- 2 infringement decisions (fines applied) 
N/A 
N/A 
- 2 closed proceedings (no infringement 
found)  
-  2 closed proceedings (commitment 
accepted) 
- 0 fines 

8 civil proceedings in 2015, 
6 in 2016; 
158 criminal sanctions applied in 2015; 
134 criminal sanctions applied in 2016; 

Annulled by the Higher Regional Court of 
Düsseldorf 
N/A 
-29 fined undertakings 
- 11 investigations ended (commitments 
accepted) 
- 67 ended (no infringement found) 
N/A 
Pending 
Injunction and fine 
N/A 
42 impositions of sanctions 
- 33 without any sanctions 
N/A 
-12 (infringement found; 4 fines applied) 
- 18  (no infringement found) 
- 9 pending 
N/A 
- 43 sanctions proceedings based on 
confidential complaints  
- by December 2016, 347 sanctions 
proceedings based on ex officio 
investigations 
95 fines applied 
N/A 
Pending 

 
 
 
 
 
 
 
 
A.8. Conciliation and mediation by public bodies 

In addition to conventional administrative enforcement in its different facets, public bodies engage 
also  in  various  forms  of  amicable  dispute  resolution.  Private  ADR  have  long  been  used.  Publicly 
managed dispute resolution systems are entering the scene and are likely to develop further. They 
represent  a  different  facet  of  the  cooperative  approach.  The  promotion  of  amicable  resolution 
between enterprises promoted by the administrative enforcers is more effective since it operates in 
the shade of conventional enforcement- parties are asked to reach amicable solutions. If they do not 
achieve that result the enforcer can shift into the more conventional array of instruments. 

This is a grey area for at least two important reasons. (1) Institutionally, there are many instances 
where bodies in charge may have a hybrid identity and the enforcement body be composed by both 
public and private actors. (2) Functionally, because the evolution of administrative enforcement into 
forms of cooperative enforcement between enforcers and infringers makes the boundaries between 
enforcement  and  ADR  blurrier.  However,  as  the  Bulgarian  example  shows  that  there  is  room  for 
public  bodies  engaging  into  mediation  and  conciliation.  The  Bulgarian legislation  has  opted  for  a 
relatively  formal  approach  where  the  Reconciliation  Commission  sitting  at  the  Ministry  of 
Agriculture can conclude its proceedings with a written binding agreement between the two or more 
litigants445. In other cases, in which the Code is enforced through legislation (as is the case in the 
UK), retailers are under a duty to negotiate in order to solve the dispute “amicably”. If this attempt 
fails, an arbitration procedure is started446. 

A.9. Monitoring Compliance by administrative bodies 

Monitoring  compliance  is  part  of  the  enforcement  function  in  both  administrative  and  private 
dispute  resolution  mechanisms.  It  is  not  generally  part  of  judicial  enforcement  where  it  is  for  the 
potentially injured parties to raise the issue of non-compliance. Within administrative enforcement 
compliance monitoring includes pre and post infringement conducts.  

Pre-infringement monitoring compliance.  

Enforcers can ask potential infringers to adopt a compliance governance that enables them to detect 
and remove UTPs. The compliance can either refer exclusively to the large buyer (chain leader) or 
can include the various segments of the chain.447. 

445  See Bulgarian Law, “Article 37k. (1) The reconciliation procedure shall be completed by concluding a written 
agreement between the parties. The agreement shall be drawn up by the commission within a 3-month time limit from 
instituting the reconciliation procedure and shall be provided to the parties to the dispute. (2) The parties to the dispute shall 
conclude the agreement within a 10-day time limit of receiving it. (3) In case that within the time limit under Paragraph 1 
the reconciliation commission has not provided a written agreement or the agreement is not accepted by the parties to the 
dispute, the procedure shall be terminated.” 
446 UK, THE GROCERIES (SUPPLY CHAIN PRACTICES) MARKET INVESTIGATION ORDER 2009, Sec. 11. 
Dispute resolution scheme. 
447 See CGA Compliance tips: “Compliance tips.  
Retailers should take the following steps to ensure they comply with the Code, and mitigate the financial and reputational 
risks of non-compliance:  1. Start at the top – all compliance efforts stand or fall based on whether they are supported (and, 
crucially, seen to be supported) by senior management. Regular and unequivocal reminders from senior management about 
both the terms of the Code, and the business’s commitment to compliance, are essential.   

183 

 
 
 
                                                 
 
Post- infringement monitoring compliance. Using scorecards 

Enforcers  have  to  monitor  compliance  after  the  infringement.  Post-infringement  monitoring 
encompasses not only monitoring compliance with commitments, recommendations, and sanctions 
but also the infringer’s efforts to remove the primary causes of the infringement. Not only enforcers 
have to ensure that sanctions are complied with and that the infringement is terminated but they also 
have to make sure that the causes of the infringement, like the transactional model along the chain, 
are  removed  and  transactional  practices  are  modified.  Monitoring  the  behaviour  of  the  infringers 
over time is relevant to verify compliance with the specific order (e.g. injunction) and to evaluate 
improvements over time fairer distribution of risks along the chain. The majority of enforcers do not 
have a stable monitoring system of the infringers’ conduct. The Grocery Code adjudicator (GCA) in 
the  UK  adopts  the  continuous  improvement  approach  and  monitors  the  conduct  of  the  infringers 
over time448.  

Especially  important  when  collaborative  modes  are  adopted  is  the  continuous  improvement 
approach. Often changes requested by the enforcer after the infringement call for a re-adaptation of 
the chain. The sanctions and the remedies focus on the practices but the causes of the practice may 
lie  in  the  organizational  structure  of  the  chain.  To  monitor  the  changes  preventing  UTPs  in  the 
indicators  measure 
future  requires  specific 
improvements  over  time  when  the  removal  of  infringement’s  causes  requires  structural  changes 
hard  to  implement  instantly.  Scorecards  look  at  the  behaviour  and  its  impact  on  the  entire  chain. 
Monitoring  compliance  should  look  at  improvements  made  by  the  chain  leader  in  organizing 

like  scorecards.  Scorecards  with 

instruments 

2. Appoint a Code Compliance Officer – to raise awareness of the Code both internally and externally, and report to 
internal Compliance and Audit Committees. The GCA expects Code Compliance Officers to be proactive in identifying, 
pursuing and resolving potential Code issues across the business.   
3. Encourage and facilitate internal communication of Code issues – proper compliance requires engagement and a joined-
up approach from all the business areas to which the Code is relevant (e.g. buyers, finance and marketing may all be 
affected by the rules against recharging design costs to suppliers). The GCA found that Tesco’s buyer and finance teams 
were not co-ordinating on Code issues, so were not fully aware of what each other were doing.    
4. ‘Hardwire’ the Code into supplier agreements – retailers should review their agreements, both standard Ts & Cs and 
bespoke supplier agreements, to ensure that they reflect the Code obligations (including by being clear and transparent) and 
that all the terms of each supplier’s agreement are captured in writing. Each supplier should have a copy of their agreement.   
5. Be clear and consistent with suppliers – if you do not already use standard wording on invoices and other 
communications concerning payments and charges, consider adopting that to ensure suppliers will always understand what 
they are being told.   
6. Review existing supplier payment processes – it is vital to ensure that payments to suppliers are not delayed 
unreasonably, whether deliberately or just due to systemic failures, inefficiencies or weaknesses.    
7. Avoid unilateral deductions from money owed to suppliers – give suppliers clear notice and explanations of proposed 
deductions, and a chance to dispute them before they are imposed.   
8. Consider an independent complaints procedure – ideally, this should be separate from the buyer who usually deals with 
the supplier. Tesco has created a Supplier Helpline with the aim of dealing with invoice queries and other supplier issues 
within 48 hours.    
9. Review performance against compliance goals – an effective compliance program needs regular reviews of the 
business’s performance against its key goals. Tesco committed to introduce regular audits throughout the year, and make 
bi-annual compliance declarations. It also committed to taking disciplinary action against employees responsible for 
breaching the Code, where necessary.    
10. Train staff – every good compliance programme requires regular, ongoing training of new and existing staff 
(particularly senior management, those dealing with suppliers and – as the Tesco case made clear – finance teams) to 
ensure familiarity with and understanding of their obligations. To be truly valuable, training must never be generic. It 
should be tailored to the circumstances of the retailer in question, and delivered to different internal audiences in ways that 
reflect their specific roles, responsibilities and practical experiences.” 
448 See Grocery Code Adjudicator Annual Report and Accounts 2016/2017. 

184 

 
 
 
                                                                                                                                                                       
exchanges along the chain by involving first, second, and third tier suppliers together with multiple 
intermediaries. 

For  example,  UTPs  related  to  the  payment  system  along  the  chain  requires  time.  The  payment 
system  in  long  term  relationship  may  require  deep  reorganization.  For  example,  often  payments 
include  some  degree  of  input  financing,  some  contribution  to  new  technologies,  premiums  for 
sustainability achievements. These may be factored into the  price or may be paid separately, they 
may be paid before or after performance. In the former case they provide resources and represent 
and investment. In the latter case they simply reward the performance and its quality. Modes and 
time  of  payment  have  deep  influence  on  the  investment  strategies  of  farmers  with  repercussions 
along the entire chain.  

Measuring compliance in the medium term presupposes a set of targets and indicators that buyers 
and chain leaders have to put in place with the collaboration of all the actors along the chain. 

What are the elements that should be measured? What are tools to measure improvements? These 
are  among  the  issues  that  would  deserve  more  in-depth  analysis  beyond  the  boundaries  of  the 
present Study. 

IV.B) Judicial Enforcement 

Judicial enforcement complements administrative enforcement. It covers remedial areas that are not 
affected by administrative proceedings and it provides the potential injured party with a much more 
active  role  than  they  can  play  in  administrative  proceedings  where  the  relationship  is  between 
enforcer and infringer(s).  

Judicial  enforcement  may  include  criminal  and  civil  UTPs.  It  may  concern  one  or  multiple 
infringers and one or multiple affected producers. When multiple infringers cooperate in deciding 
and  operationalizing  the  UTP,  joint  and  several  liability  can  be  applied449.  Many  specific 
legislations define  UTPs  as  civil  or  administrative  infringement.  Some  MSs  (notably  Ireland  and, 
partly, Romania and Austria) however emphasize the criminal aspects of UTPs and design them as 
criminal  offences.  In other legal systems, the possibility to issue criminal  sanctions in  addition to 
administrative sanctions and civil remedies reflects the different facets of UTPs. For example, Italy 
regulates UTPs and makes criminal offences alternative to administrative infringements. The nature 
of the infringement results into an enforcement mechanism. If the infringement can be characterized 
at  the  same  time  as  administrative,  criminal,  and  civil  then  multiple  enforcers  can  act.  The 
multiplicity  of  enforcement  systems  reflects  the  relevance  of  complementarity  among  various 
pillars of the enforcement triangle. 

The  new  legislations  mainly  refer  to  UTPs’  administrative  enforcement.  Those  UTPs  that  are not 
specifically  included  in  that  legislation  can  still be  tackled  via  general  judicial  enforcement  when 
they  represent  a  breach  of  contract  or  an  act  of  unfair  competition.  That  is  to  say,  the  new  MSs 
legislation  has  not  replaced  the  general  clauses  that  were  used  before  to  address  UTPs450.  Hence, 
judicial  enforcement  applies  to  the  new  legislation  for  aspects  concerning  restitution  and 

449 See e.g. § 13, Austrian Unfair Competition Act. 
450 See e.g. sec. 6(5), Hungarian Law (Act XCV 2009): “Notwithstanding any proceeding pursuant to this Act, the injured 
supplier may enforce its claim based on the distributor’s unfair conduct directly before court in a civil procedure.”. 

185 

 
 
 
 
                                                 
compensation not covered by administrative enforcement, and as a general form of enforcement for 
the UTPs not included in the new legislation.  

In  fact,  judicial  enforcement  plays  an  important  role  in  MSs  that  have  not  adopted  a  dedicated 
legislation on UTPs, mostly representing the only means of protection for UTP’s injured parties. In 
these cases, courts apply general contract or tort law and, when relevant, competition law. The lack 
of  a  dedicated  enforcing  authority and  the costs  and  length  of  judicial  proceedings  may  represent 
one  of  the  drawbacks  of  not  adopting  dedicated  legislation  on  UTPs.  This  conclusion  may  also 
apply  to  those  MSs  that  have  only  adopted  a  limited  set  of  provisions  mainly  dealing  with  pre-
contractual misleading and  aggressive  commercial  practices  relying  only  on  judicial  enforcement. 
Indeed, this is the case in Belgium, Denmark, Finland, Sweden, whose legislative approach, mainly 
drawn on consumer law, has been described above (see § III). In these four MSs, the prohibition of 
unfair  commercial  practices  is  enforced  by  courts.  In  some  cases,  specialized  courts  (such  as 
Commercial or Market Courts) have jurisdiction (so in Belgium, Finland and Sweden). Otherwise 
general  courts  are  competent.  Courts  have  the  power  to  impose  injunctions  (often  reinforced 
through conditional penalties – astreintes) and fines. In some legislation the right to damages and 
restitution is specifically recognized (Denmark). 

Access  to  judicial  enforcement  is  primarily  granted  to  those  injured  by  UTPs.  They  can  act 
individually  or  jointly  when  the  same  UTPs  has  affected  multiple  producers  or  even  multiple 
enterprises  along  the  chain.  Producers’  organizations  may  play  different  roles.  (1)  They  may  be 
granted  an  autonomous  right  to  access  court.  In  some  MSs  the  law  defines  specifically  the 
associations and public bodies entitled to bring a civil action before the Court451. Lacking specific 
legislation  general  provisions  of  civil  procedure  apply  to  regulate  standing  and  the  possibility  for 
producers  organizations  to  seek  remedies.  In  this  case  they  protect  the  collective  interests  of 
producers or more broadly of parties along the chain. (2) Alternatively, they may be granted a right 
to represent producers in the proceedings, filing a claim in their own interest. (3) Finally there are 
MSs which do not allow producers associations to be a party in the judicial proceeding. When they 
are  not  granted  a  right  to  be  a  party  to  the  proceeding  they  may  be  enabled  to  intervene  in  the 
proceeding.  Third  party  intervention  does  not  warrant  a  right  to  seek  an  independent  remedy  but 
simply a right to take part in the judicial proceedings and to present evidence on the existence of the 
practice and its harmful consequences.  

Table n. 13: Empowerment of enterprises’ associations in judicial enforcement of UTP legislation 
(examples)   

MSS 

POWER OF ENTERPRISES’ ASSOCIATIONS IN THE 
ENFORCEMENT OF UTP LEGISLATION BEFORE COURTS 
(EXAMPLES) 

451  See  for  example  France  L.  470-7  of    code  de  commerce  states:  «  Les  organisations  professionnelles  peuvent 
introduire  l'action  devant  la  juridiction  civile  ou  commerciale  pour  les  faits  portant  un  préjudice  direct  ou  indirect  à 
l'intérêt collectif de la profession ou du secteur qu'elles représentent, ou à la loyauté de concurrence“. See for example 
the Austrian unfair competition Act “General provisions Claim for an injunction: “§ 14. (1) In the cases referred to in 
Sections 1, 1a, 2, 2a, 3, 9c and 10, an injunction for cessation may be sought by any trader who offers goods or services 
of  the  same  or  related  species  or  in  the  commercial  market  (competitor)  or  by  associations  promoting  the  economic 
interests  of  businesses,  provided  these  associations  represent  interests  that  are  affected  by  the  action.  In  the  cases 
referred to in Sections 1, 1a, 2, 2a and 9c, an injunction may also be claimed by the Federal Chamber for Workers and 
Employees, the Austrian Economic Chamber, the Conference of Chairs of the Austrian Chambers of Agriculture, the 
Austrian  Trade  Union  Federation  or  the  Federal  Competition  Authority.  In  cases  of  aggressive  or  misleading 
commercial practices under § 1 para. Point 2, paragraph 1 2 to 4, Section 1a or Section 2, an injunction may also be 
claimed by the Association for Consumer“. 

186 

 
 
 
 
                                                 
AUSTRIA 
FRANCE 

power to file suits for cease and desist orders before Court 
power to start civil proceedings before the Court 

Judicial  enforcement  is  also  open  to  administrative  authorities  and  branches  of  executives452.  In 
some MSs like France the Ministry of Economy is granted the possibility to seek remedy that would 
not  be  available  to  the  injured  parties.  This  the  case  for  amende  civile  and  for  ‘repetition  de 
l’indu’453. Other MSs like Austria grant several bodies the possibility to seek judicial remedies454.  

Judicial  enforcement  includes  primarily  compensation  and  restitution.  To  a  limited  extent, 
especially  when  unfair  competition  is  applicable,  judicial  injunctions  can  also  be  issued.  Judicial 
injunctions are granted in those systems that have extended the consumer regulation implementing 
dir.  2005/29455.  Other  MSs  explicitly  grant  the  judge  the  power  to  issue  an  injunction  and  other 
corrective  measures  (e.g.  Cyprus,  France,  Germany)456.  In  some  limited  cases  judicial  remedies 
include  also  civil  penalties  (amendes  civiles)457.  Moreover,  in  France  the  code  de  commerce 
imposes  a  renegotiation  clause  whose  absence  can  be  punished  with  an  administrative  penalty458. 

452 See France Code de Commerce art. 442/6 “ III. - L'action est introduite devant la juridiction civile ou commerciale 
compétente par toute personne justifiant d'un intérêt, par le ministère public, par le ministre chargé de l'économie ou par 
le  président  de  l'Autorité  de  la  concurrence  lorsque  ce  dernier  constate,  à  l'occasion  des  affaires  qui  relèvent  de  sa 
compétence, une pratique mentionnée au présent article.” 
See Austrian Unfair competition Act, art. 14, cited above (fn n. 72). 

453 See France art. 442-6 code de commerce. 
454 See § 14, Austrian Unfair Competition Act. 
455 See, e.g., § 14, Austrian Unfair Competition Act. 

456  See  France  Art.  442  6  code  de  commerce  :  “IV.  -  Le  juge  des  référés  peut  ordonner,  au  besoin  sous  astreinte,  la 
cessation des pratiques abusives ou toute autre mesure provisoire.” 

457 See France Art. 442-6 code de commerce: “Ils peuvent également demander le prononcé d'une amende civile dont le 
montant ne peut être supérieur à cinq millions d'euros. Toutefois, cette amende peut être portée au triple du montant des 
sommes indûment versées ou, de manière proportionnée aux avantages tirés du manquement, à 5 % du chiffre d'affaires 
hors taxes réalisé en France par l'auteur des pratiques lors du dernier exercice clos depuis l'exercice précédant celui au 
cours duquel les pratiques mentionnées au présent article ont été mises en œuvre” 

 

458  See  French  Code  du  Commerce  “Article  L441-8,  Cour  de  Cassation,  Com.,  21 janvier 2014,  pourvoi  n° 12-
29.166, Bull. 2014, IV, n° 11. Art. 441-8, Modifié par Ordonnance n° 2017-303 du 9 mars 2017 - art. 2: Les contrats 
d'une  durée  d'exécution  supérieure  à  trois  mois  portant  sur  la  vente  des  produits  figurant  sur  la  liste  prévue  au 
deuxième  alinéa  de l'article  L.  442-9,  complétée,  le  cas  échéant,  par  décret,  dont  les  prix  de  production  sont 
significativement affectés par des fluctuations des prix des  matières premières agricoles et alimentaires comportent 
une  clause  relative  aux  modalités  de  renégociation  du  prix  permettant  de  prendre  en  compte  ces  fluctuations  à  la 
hausse comme à la baisse. 

Cette clause, définie par les parties, précise les conditions de déclenchement de la renégociation et fait référence à un ou 
plusieurs  indices  publics  des  prix  des  produits  agricoles  ou  alimentaires.  Des  accords  interprofessionnels  ainsi  que 
l'observatoire de la formation des prix et des marges des produits alimentaires peuvent proposer, en tant que de besoin 
et pour les produits qu'ils visent, des indices publics qui peuvent être utilisés par les parties, ainsi que les modalités de 
leur utilisation permettant de caractériser le déclenchement de la renégociation. 
La renégociation de prix est conduite de bonne foi dans le respect du secret en matière industrielle et commerciale et du 
secret des affaires, ainsi que dans un délai, précisé dans le contrat, qui ne peut être supérieur à deux mois. Elle tend à 
une répartition équitable entre les parties de l'accroissement ou de la réduction des coûts de production résultant de ces 
fluctuations.  Elle  tient  compte  notamment  de  l'impact  de  ces  fluctuations  sur  l'ensemble  des  acteurs  de  la  chaîne 
d'approvisionnement. Un compte rendu de cette négociation est établi, selon des modalités définies par décret. 
Le fait de ne pas prévoir de clause de renégociation conforme aux deux premiers alinéas du présent article, de ne 
pas respecter le délai fixé au troisième alinéa, de ne pas établir le compte rendu prévu au même troisième alinéa 
ou de porter atteinte, au cours de la renégociation, aux secrets de fabrication ou au secret des affaires est passible 
d'une amende administrative dont le montant ne peut excéder 75 000 € pour une personne physique et 375 000 € 
pour  une  personne  morale.  L'amende  est  prononcée  dans  les  conditions  prévues  à  l'article  L.  470-2.  Le 

187 

 
 
 
 
                                                 
 
Publication  of  the  judgment  is  allowed  in  some  MSs.  The  party  who  suffered  harm  and  or 
producers’ associations can ask to publish the judgment at the expenses of the infringer459. 

MS 

AUSTRIA 
FRANCE 

GERMANY 

HUNGARY 

Table n. 13-bis: Publication of enforcement decisions by courts 
Summary information (examples, not necessary exhaustive) 

PUBLICATION OF COURT’S DECISIONS ON UTP 
ENFORCEMENT 
X 
X 
X 
(for injunctions) 
X 

Judicial enforcement varies across MSs but is generally used less than administrative enforcement. 
In addition to the low level of litigation there are noticeable variations concerning the legal basis to 
bring civil actions. In some MS the source is contract law, in other tort or extracontractual liability, 
in other unfair competition, and restitution. Different causes of action may bring about differences 
about  the  availability  of  injunctive  relief  and  the  level  of  compensation  for  harm.  The  new 
legislations seem to converge towards a ‘contractualization’ of UTPs but differences remain within 
and between legal systems about injunctions and civil penalties.  

Judicial  enforcement  includes  litigation  with  multiple  infringers.  Multiplicity  of  infringers  can 
materialize  at  least  in  two  different  ways:  one  where  the  infringers  all  part  of  a  supply  chain 
(vertical  multiplicity),  the  other  where  they  are  competitors  but  all  engage  in  the  same  conduct 
against the same producers (horizontal multiplicity like in a cartel). When the UTPs are committed 
by  multiple  infringers  they  can  be  severally  and  jointly  liable  for  damages  and  be  the  joint 
addressees  of  an  injunction  ordering  to  stop  the  practices  and  remove  the  harmful  consequences. 
For example, in a supply chain the UTP may be the result of complicit behaviour of the retailer and 
the traders against the producers. Are the effects of the remedy relevant to all the infringers? Is there 
a difference generated by different bargaining power?  

maximum de l'amende encourue est doublé en cas de réitération du manquement dans un délai de deux ans à 
compter de la date à laquelle la première décision de sanction est devenue définitive”. 
459  See  for  example  the  French  Code  de  Commerce  art.  442/6  “La  juridiction  ordonne  systématiquement  la 
publication, la diffusion ou l'affichage de sa décision ou d'un extrait de celle-ci selon les modalités qu'elle précise. 
Elle peut également ordonner l'insertion de la décision ou de l'extrait de celle-ci dans le rapport établi sur les opérations 
de l'exercice par les gérants, le conseil d'administration ou le directoire de l'entreprise. Les frais sont supportés par la 
personne condamnée.” 
See for example the Austrian Unfair competition act: “25. (1) In the cases of §§ 4 and 10, publication of the sentence 
may be ordered at the expense of the sentenced party. (2) In the cases of §§ 4 and 10, the court may, upon application 
by the acquitted party, authorise such party to have the acquittal published at the expense of the plaintiff in the private 
prosecution within a specified period of time. (3) Where, except in the cases of §§ 11 and 12, a suit for a cease-and-
desist  order  is  undertaken,  the  court  shall,  upon  application,  authorise  the  prevailing  party,  if  such  has  a  legitimate 
interest  in  it,  to  have  the  sentence  published  at  the  opposing  party's  expense  within  a  specified  time  limit.  (4)  The 
publication shall comprise the wording of the sentence. The manner of publication shall be defined in the sentence. (5) 
In civil proceeding[s], the court may, upon application by the prevailing party, define a text of the publication which 
varies  from  or  supplements  the  scope  or  wording  of  the  sentence.  Such  application  shall  be  filed  not  later  than  four 
weeks  after  the  sentence  has  become  final.  If  such  application  is  only  filed  after  the  end  of  the  hearing,  it  shall  be 
decided by the court of first instance by an order after the sentence has become final.” 

188 

 
 
 
 
 
                                                                                                                                                                       
As to the injunction, the bargaining power distribution and the fault of each party plays no decisive 
role to define the effects. All the infringers have to comply with the injunctions. Some differences 
may occur if the injunction has not only a prohibitory (negative) but also an affirmative facet. For 
example, if the injunction includes an order to modify the procurement policy within the chain, then 
targets may be differentiated according to their decision-making power along the supply chain.  

A more complicated case concerns damages when multiple infringers are involved. Several models 
can be deployed. It is often the case that damages can be awarded where the infringer is at fault or 
there has been an intention to cause harm. Joint and several liability can be granted if all the parties 
are at fault or some have committed an intentional tort and others a negligent tort. When the chain 
leader can be strictly liable for a UTP there can be joint and several liability of first and second tier 
suppliers based on fault, combining strict liability and negligence. But what if the supply chain is 
highly  hierarchical  and  the  chain  leader  has  imposed  the  UTP  on  the  suppliers  which  as  a  result 
have imposed it on the producers? Damages could be paid only by the chain leader if the practice 
towards producers has been imposed by the chain leader onto the processors which were ‘forced’ to 
apply the practice. The other participants to the chain have to show that they were forced to adopt 
the  practice  under  the  threat  of  contractual  termination  or  similar  threats.  Only  coercion  might 
enable liability’s exemption. Otherwise joint and several liability applies. When multiple infringers 
are at fault, differences in bargaining position may result in different degrees of culpability which in 
turn may determine an uneven allocation of the burden to compensating damages. 

A  significant  difficulty  explaining  the  low  level  of  judicial enforcement  is  proving the  amount  of 
damages at least for some UTPs. While clearly UTPs shift costs along the chain it might not be easy 
to  determine  the  amount  of  unlawful  cost  shifting  for  practices.  Easier  is  the  case  to  determine 
compensation  for  late  payment,  retroactive  conditions,  unilateral  modifications  of  contracts, 
unlawful termination of the business relationship. 

The difficulties increase even further if the consequences of UTPs have to be evaluated not at the 
level of the specific bilateral relationship but at the chain level (multiple injured parties) where the 
interdependent effects of UTPs may have very wide reach and the distribution of costs may include 
several stages of the chain. 

Lack  of  a  clear  legislative  framework  until  the  specific  legislations  were  enacted,  the  lack  of 
incentives to use the court system, the fear factor, and the concern about disruptive consequences in 
the  business  relationship  have  all  contributed  to  a  limited  use  of  adjudication  as  an  enforcement 
mechanism.  The  weaknesses  of  judicial  enforcement  should  not  lead  to  the  conclusion  of  its 
uselessness.  On  the  contrary,  many  consequences  of  UTPs  can  only  be  tackled  via  judicial 
enforcement.  Judicial  enforcement  needs  some  reform  that  has  not  been  addressed  by  the  new 
legislation, focusing mainly on administrative enforcement. 

Complementarity  poses  challenges  to  the  modes  of  coordination  between  various  enforcement 
systems  all  in  place.  National  legislations  do  not  effectively  address  the  issue  of  coordination 
among enforcement mechanisms and between different judicial disputes. An interesting exception is 
the Irish system where it is expressly stated that findings of an infringement by a retailer constitute 
res judicata and can be used by different parties in subsequent litigation460. Here the relationship is 

460 CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016 S.I. NO. 
35 OF 2016: “The Act also provides anyone who is aggrieved by the failure of a retailer or wholesaler to comply with any 
regulations or with any compliance notice issued under the relevant Section of the Act, shall have the right of action for 

189 

 
 
 
                                                 
 
between criminal findings and a right of action for civil remedies. If the criminal offence has been 
ascertained the civil action can be based on those findings. Hence when the large retailer engages 
into criminally relevant behaviour all those affected can bring civil actions asking for damages. In 
the  Irish  legal  system  the  civil  action  seems  a  ‘follow  on’  of  the  criminal  prosecution461. 
Coordination  between  judicial  and  administrative  enforcement  is  needed  both  (1)  when  the  UTP 
constitutes a criminal offence to regulate ne bis in idem consequences, and (2) when a civil remedy 
may  be  sought  to  complement  ad  administrative  sanction  to  ensure  consistency  between  the 
administrative decision and the judgement. 

IV C) Dispute resolution mechanisms 

The third pillar of the enforcement architecture is private dispute resolution. Enforcement systems 
exist at national level and more recently have been adopted at EU level. The model is collaborative 
and combines monitoring with informal enforcement. Formal enforcement is left to administrative 
authorities and to courts. 

The Food Supply Chain Initiative (FSCI) is a joint initiative developed by 8 EU-level associations 
representing  the  food  and  drink  industry  (FoodDrinkEurope),  the  branded  goods  manufacturers 
(AIM), the retail sector (the European Retail Round Table [ERRT], EuroCommerce, EuroCoop and 
Independent  Retail  Europe),  the  European  Association  of  Craft,  Small  and  Medium-sized 
Enterprises (UEAPME) and agricultural traders (CELCAA). The SCI is managed by a Governance 
Group.  

“The SCI, a voluntary framework for implementing the principles of good practice was launched in 
September 2013. 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.”462 

The  FSCI  is  organized  in  a  multilevel  structure  with  a  EU  platform  and  national  platforms.  The 
FSCI  does  not  engage  in  adjudication.  It  monitors  compliance  with  principles  of  the  code  of 
practice and, when violations are in place, tries to solve them informally. The platform does not act 
ex officio but on the basis of complaints lodged by members. Only disputes among members can be 
brought before the governance group. 

 “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 

relief against that retailer or wholesaler in the Circuit Court (any such relief, including exemplary damages, not being in 
excess of the limits of the jurisdiction of the Circuit Court in an action founded on tort). “ 

461 CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016 S.I. NO. 
35 OF 201” Finally, the Act also provides that, where a Court has made a final finding in a particular case under these 
Regulations, that finding is res judicata for the purpose of subsequent proceedings whether or not the parties to those 
subsequent proceedings are the same as the parties to the first mentioned proceedings.  Private litigant, relying on this 
legal doctrine, will not be required to prove the contravention of the relevant provisions afresh in a follow-on action 
in respect of the same contravention. Rather he or she will be able to rely on that earlier finding for the purpose of 
an action for damages.” 
462 See Commission Report p. 8 

190 

 
 
 
                                                                                                                                                                       
 
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.”463 

Sanctions in case of non-compliance are membership based and the lack of compliance can lead to 
exclusion. No fining or injunctive power is conferred to the governance group. 

The  regulatory  approach  is  based  on  the  identification  of  the  unfair  practices  and  the 
recommendation  of  best  practices464.  When,  as  it  is  the  case  in  Italy,  the  code  is  incorporated  in 
legislation, this becomes the regulatory approach in administrative enforcement. FSCI distinguishes 
between minor and major breaches. The former do not result in any public statement while the latter 
do. 

It  was  shown  that  in  principle  administrative  enforcement  can  be  applicable  both  to  single 
infringement,  involving  one  or  multiple  farmers,  and  other  players  along  the  chain,  and  multiple 
infringements committed by different parties along the same chain or by several buyers. The most 
innovative  contribution  is  the  FSCI  aggregated  dispute  regime.  Aggregated  disputes  before  the 
governance group concern infringements that affect multiple members and are committed by one or 
several  members.      They  are  dealt  by  the  EU  governance  group  when  infringers  are  located  in 
different MS or by national platforms when they all operate in the same MS. 

A  variety  of  private  enforcement  mechanisms  can  be  triggered  from  internal  dispute  resolution 
when the large enterprises have their own to mediation and arbitration. 

V. Rethinking the policy options for UTPs in agrifood supply chains: 
an agenda for future research 

The  analysis  shows  a  significant  amount  of  unfair  practices  along  agrifood  supply  chain.  There 
seems to be a growing disjunction between the economic evolution of supply chains and their legal 
regulation. We are confronted with both a regulatory and an enforcement gap. This is certainly true 
for  UTPs  but  it  probably  applies  to  other  issues  concerning  contracting  along  agrifood  supply 
chains. 

The  gap  is  caused  more  by  the  legal  fragmentation  than  by  the  absence  of  any  legislative 
framework. Differences in EU concern both the relevant UTPs, the legal techniques to prohibit or 
control  the  practices,  the  enforcement  toolkit,  the  distinction  between  individual  and  mass 
infringements, and those between single and multiple infringers. Remarkable differences exist also 
for  the  scope  of  application  of  MS  legislation.  These  differences  reflect  alternative  regulatory 
objectives and coverage. For example, whether general rules should regulate UTPs in all sectors or 
whether agrifood supply chain require specific rules, whether the same rules should apply both in 
domestic and trans-border UTPs, whether they should cover the entire chain or only some segments, 
whether they should apply equally along the chain or stronger protection should be granted to small 
producers at the upstream part of the chain.   

463 See Commission Report p. 8 
464 See Vertical relationships in the Food Supply Chain: Principles of Good Practice, and more specifically 
Recommendation for Good Practice in applying the SCI principles of fair dealing, information, confidentiality, and 
justifiable request, enacted at the end of 2017.  

191 

 
 
 
                                                 
A sub question about the scope of application is related to extraterritoriality, e.g. the desirability to 
extend legal protection to non-EU agricultural producers. Should EU and MSs legislation prevent 
UTPs against non-EU producers? Should access to enforcement mechanisms be granted to all over 
the  world  producers  selling  products  in  the  EU  market?  A  global  supply  chain  approach  that 
features EU as a global regulatory player should certainly move towards such an approach. EU law 
should  control  the  global  chains  from  every  perspective  including  risk  and  power  allocation,  and 
potential  abuses.  This  policy  change  can  however  increase  the  costs  of  enforcement  and  translate 
into  a  less  effective  enforcement  for  EU  producers.  Hence,  there  are  costs  for  adopting 
extraterritorial  scope.  Possible  solutions  to  the  cost  of  enforcing  practices  extraterritorially  might 
differentiate  the  relevance  of  enforcement  mechanism  and  make  extraterritorial  enforcement 
available  only  for  significant  and  widely  spread  infringements  that  include  both  EU  and  non  EU 
producers.  This  option  would  leave  out  of  the  EU  scope  minor  and  individual  infringements 
towards non EU producers. 

Variations about legal protection on the one hand, represent a positive ground for experimentation; 
on  the  other  hand,  make  it  more  difficult  to  tackle  cross  border  violations.  Fragmentation  makes 
enforcement  difficult  especially  in  transborder  infringements  that  occur  in  EU  and  within  global 
chains.  A  decentralized  enforcement  mechanism  does  not  provide  effective  solutions  for  UTPs 
occurring  in  global  markets  where  agricultural  commodities  come  from  countries  different  from 
those of food processing and consumption.  

The  four  dimensions  that  need  to  be  redefined  in  a  legislative  intervention  concern  the 
national  versus  European  dimensions  and  the  public  versus  private  dimensions  both  in 
regulation  and  enforcement.  It  is  clear  that  the  solution  is  not  choosing  between  them  but  it  is 
about their combination. How to combine MS and EU level and how to combine public and private 
regimes are the most urgent policy questions related to a possible legislative intervention. 

The most urgent issues concern whether a EU legislative intervention and impact is useful to reduce 
and  mitigate  UTPs  and,  in  the  affirmative  case,  what  should  its  determinant  features  be.  A  EU 
intervention is useful to warrant a common ground in terms of principles related to forbidden UTPs 
and  enforcement  mechanisms  with  identification  of  priorities  over  modes  of  infringement  and 
sanctioning  policies.  It  is  a  useful  opportunity  to  defining  coordination  mechanisms  among 
enforcers especially relevant in transborder multi party infringements. 

A  EU  legislative  intervention  can  provide  principles  that  MSs  legislation  and  private  regulation 
have to follow. If it only provides minimum harmonization, MSs are free to broaden the scope of 
intervention,  the  coverage  of  UTPs  and  the  strictness  of  enforcement.  A  softer  approach  can  be 
limited  to  principles  leaving  details  to  MSs  legislation.  A  harder  approach  can  also  include 
description  of  (some)  prohibited  practices.  In  the  latter  case,  the  alternative  is  between  a  list  that 
exemplifies and a list that constitutes a mandatory floor to be expanded by adding prohibited UTPs 
at MS level. 

Current  variations  in  MSs  legislation  concern  the  combination  and  interaction  between  principles 
like the duty to act in good faith and engage in fair dealing and specific forbidden practices. These 
distinctions  result  in  different  allocation  of  power  between  rule  makers  and  enforcers.  Some 
legislations  are  more  principle-  based  and  the  identification  of  practices  is  mainly  left  to  the 
enforcers. Other legislations are more specific and the general principles have interpretative rather 
than creative functions. In the latter case enforcers enjoy less discretion. But differences across MSs 
occur also between specific rules as the late payment example shows (MSs have different thresholds 
of  days  to  define  what  constitutes  a  late  payment).  Whereas  different  MSs  legislative  techniques 
may reflect alternative policy options, some limits to legal differentiation should be drawn within 

192 

 
 
 
the  boundaries  of  subsidiarity  and  proportionality.  In  other  words,  differentiation  of  legal 
instruments across MSs should not undermine consistency of policy goals and results at EU level. 

Within the array of different legislative techniques, the choice between mandatory and default rules 
becomes  very  relevant.  Moving  away  from  a  crude  alternative  between  mandatory  rules  and 
freedom of contract for a wider set of options, is necessary; in some areas, including default rules 
that parties can deviate from by using, for example, a ‘comply or explain’ technique would certainly 
increase the effectiveness of legislation. A good illustration of a combined use between mandatory 
and default is provided by the FSCI regulatory approach. Within FSCI prohibitory mandatory rules 
define unfair practices, default rules recommend good practices. A more complex architecture could 
include default rules also in relation to UTPs prohibition. In this case the prohibited practices may 
be  differentiated  between  those  regulated  by  mandatory  and  those  regulated  by  default  rules. 
Default rules may permit parties’ negotiations over contractual terms as long as certain procedures 
detailed in the contract are met, as exemplified in the above analysis (see § III.2). Default rules may 
allow  parties  to  reallocate  the  risks  and  costs  as  long  as  redistribution  is  made  transparently  and 
within  the  parameter  of  proportionality.  Default  rules  permit  taking  into  account  chains’ 
specificities  concerning  the  commodities,  the  level  of  industry  concentration,  the  role  of  large 
distribution. The use of alternative contractual clauses to the legislative default should be carefully 
monitored to ensure that no abuses take place and that the default clearly represent the majoritarian 
best  option.  One  possibility  is  the  creation  of  a  EU  observatory  of  agri-food  trade  practices  that 
collect information about contractual clauses deployed along the chains. This approach can be based 
on self-reporting by large retailers and buyers and it should at least distinguish between horticulture, 
crop, aquaculture, livestock. 

On the substantive side a  clearer  regime of private international law to regulate applicable law in 
transborder infringements involving both multiple infringers and multiple injured parties is needed. 
A second, related dimension, concerns individual versus multiparty infringements and in the latter 
case the different regimes concerning multiparty infringers when they operate in different MSs. It is 
highly  recommended 
introduce  a  few  general  rules  about  multiparty  transborder 
infringements to be implemented by MSs at national level. 

to 

Enforcement  includes  public  and  private  regimes  with  a  remarkable  variety  of  instruments  and 
practices.  

There is clearly an enforcement gap to tackling UTPs. The gap stems from ineffective coordination 
within  MSs  and  between  MSs.  Such  enforcement  gap  increases  even  more  in  relation  to  trans-
border  infringements.  As  to  the  enforcement  framework,  decentralized  enforcement  both 
administrative  and judicial  should  be complemented by stronger coordination  mechanisms among 
MSs.  The  new  EU  legislation  should  provide  coordination  instruments  among  administrative 
enforcers  similar  to  those  deployed  in  competition  law  under  Regulation  2003/1  or  those  just 
introduced in consumer law by EU Regulation 2017/2394. A EU legal intervention could define one 
or  more  options  for  coordination  in  case  of  cross  border  infringements  involving  several  MSs. 
Coordination  should  encompass  investigations,  sharing  information  and  evidence,  sanctioning 
practices, and remedies, especially when multiple infringers and multiple injured parties are located 
in various MSs. 

Sanctioning  practices  sensibly  differ  across  administrative  enforcers.  This  makes  inconsistency 
across  MSs  likely  to  occur.  Same  infringements  in  two  or  more  MSs  may  be  subject  to  different 
sanctions or within the same ‘sanction family’ (financial penalties) significantly different amounts 
can  be  determined.  Some  legislations  introduce  differences  between  UTPs  with  major  and  minor 
infringements.  Others  do  not  prioritize  the  seriousness  of  infringements  according  to  the  specific 

193 

 
 
 
practice.  The  principles  of  effectiveness,  proportionality,  and  dissuasiveness  should  be  applied 
consistently  by  enforcers  across  countries.  Even  if  the  sanctioning  power  is  left  to  national 
enforcers, coordination may help avoiding inconsistencies and ensuring a uniform deterrent effect.  

A  second  issue  about  enforcement  is  that  of  the  coordination  between  administrative  and  judicial 
enforcement.  Unlike  competition  law,  where  sequentiality  has  become  the  rule  with  directive 
104/2014, no coordination mechanisms have been introduced either at EU or at national level with a 
few  exceptions.  In  most  jurisdictions,  claimants  may  lodge  complaints  before  an  administrative 
enforcer  and  before  courts  simultaneously  or  sequentially.  If  no  coordination  is  in  place, 
administrative enforcers can start ex officio investigations even if a judicial dispute is in place. No 
consistency  between  the  outcomes  of  parallel  proceedings  concerning  the  same  UTP  would  be 
ensured. The same practice could be considered a UTP for the purpose of damages and not for that 
of  administrative  sanctions,  leaving  aside  instances  of  criminal  offences.  The  problem  becomes 
even more significant when administrative and judicial enforcers belong to different MSs. Given the 
interaction  between  administrative  and  judicial  enforcement  closer  coordination  between  national 
administrative  bodies  and  courts  would  also  be  highly  desirable.  A  EU  legislative  intervention 
should  at  least  clarify  what  the  alternative  options  are  leaving  MSs  the  choices  according  to  the 
principle of procedural autonomy.  

The  other  relevant  macro-question  is  whether  the  current  complementarity  between  public  and 
private regimes delivers the best results. In case of a negative answer what are the changes that can 
make complementarity work better? The two dimensions concern substantive and remedial rules.  

As to the substantive rules reinforcing the promotional role of private regulation may have positive 
effects if it is better coordinated with legislation. As previously described, there are very different 
approaches: some integrate private regulation and the code of practice in legislation, others keep a 
strong  and  stark  separation  between  legislation  and  private  regulation.  To  incorporate  different 
admissible regulatory options into a EU rule may permit having limited and consistent regulatory 
alternatives. The flexibility of private regulation can permit faster and more effective adaptation to 
the  changing  world  of  agri-food  supply  chain.  Monitoring  by  private  regulators  can  provide  rule 
makers  and  enforcers  with  up  to  date  information  about  the  evolution  of  practices  along  global 
chains.  UTPs  are  not  stable  over  time  and  new  practices  develop  as  markets  change  structure  to 
reflect different production technologies and different consumers preferences. 

As to the remedial side the current national enforcement regimes are not very effective. A reform 
should  include  the  possibility  of  private  sanctions  based  on  market  mechanisms.  The  reputational 
lever can be used more widely both in private regimes and in public enforcement systems. Reports 
publicly  available  on  the  existence  of  UTPs  and  the  applied  sanctions may  dissuade  the  infringer 
much more than any administrative sanction or injunction. This is even truer for repeat violations. 
Private  regulation  is  the  ideal  environment  to  further  develop  the  use  of  scorecards  to  measure 
improvements over time. Often enforcement focuses on the consequences and does not address the 
causes. Private regulation and forms of cooperative enforcement in the administrative domain may 
shift  the  focus  and  try  addressing  the  causes  together  with  the  consequences  of  infringements. 
Removing  the  causes  of  unfair  practices  may  require  significant  adaptations  of  supply  chain 
governance which can only occur over time. For this reason, the use of scorecards with appropriate 
indicators  and  targets  may  contribute  to  a  more  effective  market  regulation  and  to  a  better 
institutional environment for a fair and sustainable agricultural growth.   

What are the possible effects of UTPs EU legislation on the MSs current legal framework? A EU 
legislative intervention would not replace current MSs’ legislation. It would either fill in the gaps or 
complement it. The use of general civil law and competition law should be considered inadequate to 

194 

 
 
 
meet  implementation  requirements  of  a  EU  legislative  instrument.  These  MSs  will  be  obliged  to 
approve  new  rules  both  on  the  substantive  and  the  remedial  side.  The  impact  on  MSs  with  an 
existing  UTPs  legislation  would  differ.  Possibly  the  most  significant  impact  would  be  more 
effective coordination of the enforcement bodies and increasing the influence of CJEU judgments if 
preliminary references about UTPs were submitted. It would be the beginning of the process of soft 
harmonization with both an impact on intra EU trade of agricultural products and an impact on trade 
between  third  countries  and  EU,  affecting  both  the  structure  of  global  supply  chains  and  the 
exercise of unequal bargaining power.  

195 

 
 
 
 
Annex G: Study annexes - Overview on “Specific regulations on Unfair Trading Practices in Member 
State in the Business-to-Business Retail Supply Chain” 465 

Annex (extended tables) 

(within a cooperation with DG Agri and European Commission - Joint Research Center 
Ares(2017)5377697) 

by Fabrizio Cafaggi and Paola Iamiceli 

February 2018 

465  The  Report  and  its  Annex  are  based  on  data  and  information  gathered  through  a  consultation  launched  by  DG  AGRI  in  October  2017  with  the  cooperation  of  experts  and 
respondents from the 28 MSs as a follow-up of a previous consultation launched in 2015. For Greece only the answers provided in the 2015 survey have been available; neither 
survey was successful for Malta. 

196 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
LIST OF TABLES 

List of national legislations 

Table 1: Legislative instruments 

Table 2.1: Modes of regulation and prohibited unfair practices: legislative texts 

Table 2.2: Modes of regulation and prohibited unfair practices: general clauses, list of prohibited practices, contractual 
exemptions 

Table 2.3: Modes of regulation and prohibited unfair practices: commonly used general clauses and specific UTPs (6 UTPs 
list) in examined UTP legislation 

Table 3: Enforcement 

Table 3.1: Publication of UTP enforcement decisions by courts and administrative authorities 

Table 4: Fines 

Table 5: Enforcement practices 

197 

 
 
 
 
 
 
 
 
Countries 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech R. 

Denmark 

Estonia 

Finland 

List of national legislations 

Legisl. ref. 

Act on the Improvement of Local Supply and Market Conditions (Local Supply Act, Bundesgesetz vom 29. Juni 1977 zur 
Verbesserung der Nahversorgung und der Wettbewerbsbedingungen, StF: BGBl. Nr. 392/1977 (NR: GP XIV IA 4/A und 12/A AB 
565 S. 61. BR: AB 1689 S. 366 
Bundesgesetz gegen den unlauteren Wettbewerb 1984 – UWG 
StF: BGBl. Nr. 448/1984 (WV) 

Code de droit économique, Livre VI, TITRE 4, CHAPITRE 2. [Pratiques du marché déloyales à l'égard de personnes autres que les 
consommateurs], Art. VI.104-109; Inséré par L 2013-12-21/23, art. 3, 009, En vigueur: 31-05-2014 

Bulgarian Law on Protection of Competition (LPC), Art. 37a 
Art. 37a. (new - SG 56 of 2015) (1) 
Foodstuffs Act Article 19. 

Act on the prohibition of unfair trading practices in the business-to-business food supply chain, Official Gazette 117/17, enters into 
force on 7 December 2017 

Protection of Competition Laws of 2008 and 2014, section 6(2) 

Act No. 395/2009 Coll., on Significant Market Power in the Sale of Agricultural and Food Products and Abuse Thereof 

Consolidated Marketing Practices Act, Consolidated Act no. 58 of 20 January 2012 as amended by section 33 of Act no. 1231 of 18 
December 2012, section 5 of Act no. 1387 of 23 December 2012 and section 1 of Act no. 378 of 17 April 2013  

Unfair Business Practices Act 
(1061/78 amendments up to 461/2002 included) 

198 

 
 
 
 
  
Countries 

France 

Germany 
Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 
Malta 
Netherlands 

Legisl. ref. 

Article L. 442-6 (I, II) du code de commerce: unfair practices and unfair terms. 
Art. L 441-6: precontractual information duties 
Art. L. 441-7: framework distribution contracts  
Art. L. 441-8: duration contracts and price renegotiation in food market 
Art. L. 441-9: subcontracting 
Art. L 442-9: excessively low price sales imposed by buyer (in general and in the food sector) 
Art.L. 443-1: payment terms and practices 

Sec. 20 of the Act against Restraints of Competition (ARC) 
Act No. 146/1914 on “Unfair Competition”, art. 18a 
Act XCV of 2009 
on the prohibition of unfair distributor conduct vis-à-vis suppliers 
regarding agricultural and food industry products 

CONSUMER PROTECTION ACT 2007 (GROCERY GOODS UNDERTAKINGS) REGULATIONS 2016 (S.I. NO. 35 OF 2016) 

D.L. 24-1-2012 n. 1 
Disposizioni urgenti per la concorrenza, lo sviluppo delle infrastrutture e la competitività. 
Pubblicato nella Gazz. Uff. 24 gennaio 2012, n. 19, S.O. 
Art. 62. Disciplina delle relazioni commerciali in materia di cessione di prodotti agricoli e agroalimentari  
In vigore dal 19 dicembre 2012 
D.M. 19 ottobre 2012, n. 199 
Regolamento di attuazione dell'articolo 62 del decreto-legge 24 gennaio 2012, n. 1, recante disposizioni urgenti per la concorrenza, lo 
sviluppo delle infrastrutture e la competitività, convertito, con modificazioni, dalla legge 24 marzo 2012, n. 27. 

Unfair Retail Trade Practices Prohibition Law 

REPUBLIC OF LITHUANIA 
LAW ON THE PROHIBITION OF UNFAIR PRACTICES OF RETAILERS 
22 December 2009 – No XI-626 
Vilnius (As last amended by 17 December 2015 – No XII-2204) 

199 

 
 
 
  
  
  
Countries 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

OJ 2017 Item 67 ACT of 15 December 2016 to prevent the fraudulent use of contractual advantage in trade in agricultural products 
and groceries 

Legisl. ref. 

Decree-Law (DL) No. 166/2013, of 27.12, changed by Decree-Law (DL) No. 221/2015, of 8.10 (in order to provide certain 
clarifications), on “individual restrictive commercial practices”, which has revoked previous legislation on the same area (DL 370/93, 
of 29.10, with the amendments introduced by DL 140/98, of 16.05) 

Law 321/2009 on food marketing. Law no. 321/2009 

Act No. 326/2012 on unreasonable conditions in trade relations subject of which are foodstuffs entered into force on January 1, 2013 

Act on Changes and Amendments to the Agriculture Act OJ - 26/14 on 14 April 2014. 

Law 12/2013, of 2 August, measures to improve the functioning of the food supply chain. 

The Marketing Act (2008:486), implementation of Directive 2005/29/EC; annex I (list of unfair practices practices) made applicable 
to BtoB as well. 

200 

 
 
 
Countries 

Legisl. ref. 

United Kingdom 

THE GROCERIES (SUPPLY CHAIN PRACTICES) MARKET INVESTIGATION ORDER 2009 

On 9 May 2006, the Office of Fair Trading, in the exercise of its powers under section 131 of the Enterprise Act 2002 (the Act), 
referred to the Competition Commission (CC), for investigation and report, the supply of groceries by retailers in the UK. On 30 
April 2008 the CC published a report on the investigation and it contained the decision that there were adverse effects on 
competition. 
On 26 February 2009 the CC gave notice of its intention to make this order in accordance with paragraph 2 of Schedule 10 to the Act 
as applied by section 165 of the Act. Following consultation, the CC made modifications to the order and issued a further notice of its 
intention to make this order in accordance with paragraph 5 of Schedule 10 to the Act. 
The CC, in accordance with section 138 of the Act and in exercise of the powers conferred by sections 161 and 164 and Schedule 8, 
and for the purpose of remedying, mitigating or preventing the adverse effects on competition concerned and for the purpose of 
remedying, mitigating or preventing detrimental effects on customers so far as they have resulted from, or may be expected to result 
from, the adverse effects on competition, makes the following Order. 

201 

 
 
 
 
 
 
1. Legislative instruments 

Does legislation exist in EU MSs addressing unfair trade practices in business-to-business relations? 
If existing, is its scope of application limited to the food sector? 
Is it limited to specific type of potential infringers, e.g. large companies only and/or retailers only?  

Countries 

No 
legislative 
instrument 
available 

Legislative instrument on 
UTPs in BtoB relations 
(not specific for food 
chain) 

Legislative instrument on 
UTPs in food sector 

Limited scope by size 
(large businesses only) 

Limited scope by position 
in the chain (retailers 
only) 

Austria 

Belgium 
Bulgaria 

Croatia 

Cyprus 
Czech 
Republic 
Denmark 
Estonia 

X 
X 

X  
(Local Supply Act: non-
discrimination; prohibition 
of transfer of unjustified 
risk) 

X 
X 

X 

- 
- 

Greece: DG Agri survey, update: 2015 
Malta: no answer available within DG Agri survey 
The list of unfair practices 
has been amended. For 
example the unjustified 
transfer of risk is now 
regulated in § 1 (2) Local 
Supply Act 
(Nahversorgergesetz) to 
include special equipment, 
obligations to take back 
goods or assumptions of 
liability). 

X 
X 

X 

- 
- 

X  
(re-seller: >132.511 eur 
turnover in Croatia) 
(buyer, processor: > 
66.255 eur t.o. in C.) 

- 
- 

202 

X 

- 
- 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

Finland 

France 
Germany 
Greece 
Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

No 
legislative 
instrument 
available 

Legislative instrument on 
UTPs in BtoB relations 
(not specific for food 
chain) 

Legislative instrument on 
UTPs in food sector 

Limited scope by size 
(large businesses only) 

Limited scope by position 
in the chain (retailers 
only) 

- 

- 

X 
X 

X 

New legislation scheduled 
for 2019  

Update: 2015 
Plan for legislative reform  
Applies in favour of 
suppliers also if located 
out of Ireland 

Update: 2015 

X 

- 

X 
X 
X 

X 

X 

- 

- 

X 
X 

- 

- 

X 
Specific list of UTP for 
food sector 

- applies to retailers having 
significant market power, 
defined as retailers with at 
least 20 stores and a 
surface of at least 400 sqm 
in Lithuania and with an 
aggregate income in the 
last financial year that is 
not less than 116 mill eur; 
- does not apply to 
relations between retailers 
having significant market 
power and suppliers whose 
aggregate income during 
the last financial year 
exceeds EUR 40 million 

X 
X 

X 

Luxembourg 

Malta 

(The) 
Netherlands 

Poland 

Update: 2015 
No answer available 
within DG Agri survey  

X 

No but legislation applies 
when trade value in past 
two yrs or within UTP 

Out of scope of legislation: 
trade internal to 
cooperatives and 

Scope limited to the extent 
that UTP’s effects occur in 
Poland 

203 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

No 
legislative 
instrument 
available 

Legislative instrument on 
UTPs in BtoB relations 
(not specific for food 
chain) 

Legislative instrument on 
UTPs in food sector 

Limited scope by size 
(large businesses only) 

Limited scope by position 
in the chain (retailers 
only) 

agricultural producer 
groups or associations 

Law (DL) No. 221/2015, 
of 8.10, whose scope is 
transversal, also carries 
specific provisions for the 
agri-food sector. 

practices exceeds 
11933,55 eur and when 
infringer’s (group’s) 
turnover exceeds 
23.867.107,62 eur 

No, but fines are defined 
also in respect of 
infringer’s size. 
Moreover, decree-Law 
(DL) No. 166/2013, of 
27.12, changed by Decree-
Law (DL) No. 221/2015, 
of 8.10, whose scope is 
transversal, also carries 
specific provisions for the 
agri-food sector, 
specifically when the 
supplier is a micro or a 
small enterprise, producer 
organization or 
cooperative. 

X 

X 
X 

X 

No, but legal requirements 
concerning the use of 
written form in contracts 
and their minimum 

Relations within 
cooperatives are excluded  

204 

Impact assessment of 
legislation just finalised at 
the end of 2017. 

This decree-law only 
applies to companies 
established in national 
territory and to contracts 
concerning goods and 
services originating 
outside Portugal (reform) 

Not applied due to 
infringement procedure at 
EU level (C 2148/2016)  

Reform of the Agriculture 
Act approved by the 
Government in December 
2017, submitted to the 
Parliament (decision in 
January 2018) 

Portugal 

X 

Romania 

Slovakia 

Slovenia 

Spain 

 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

No 
legislative 
instrument 
available 

Legislative instrument on 
UTPs in BtoB relations 
(not specific for food 
chain) 

Legislative instrument on 
UTPs in food sector 

Limited scope by size 
(large businesses only) 

Limited scope by position 
in the chain (retailers 
only) 

contents apply to 
transactions whose value 
exceed (or will presumably 
exceed) 2500 eur and one 
of the proxies for 
unbalance relations occur 
(i.e., relation with a SME, 
or a primary producer, or 
an enterprise in economic 
dependence 

Sweden 
United 
Kingdom 

X 

X466 

X 

X 

466 More precisely, the Groceries (Supply Chain Practices) Market Investigation Order 2009 refers to groceries going beyond the food sector as strictly intended: “§ 2(1) Groceries 
means food (other than that sold for consumption in the store), pet food, drinks (alcoholic and non-alcoholic, other than that sold for consumption in the store), cleaning products, 
toiletries and household goods, but excludes petrol, clothing, DIY products, financial services, pharmaceuticals, newspapers, magazines, greetings cards, CDs, DVDs, videos and 
audio tapes, toys, plants, flowers, perfumes, cosmetics, electrical appliances, kitchen hardware, gardening equipment, books, tobacco and tobacco products, and Grocery shall be 
construed accordingly”. 

205 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
2.1 Modes of regulation and prohibited unfair practices: legislative texts 

What are the relevant legislative provisions defining UTPs? How do they look like? 

Countries 

Text/summary 

Greece: DG Agri survey, update: 2015 
Malta: no answer available within DG Agri survey 

Legisl. ref. 

Non-discrimination; prohibition of transfer of unjustified risk. 
The Local Supply Act prohibits the unequal treatment of entrepreneurs by other entrepreneurs, unless such behaviour is 
objectively justified. According to Austrian case law, this non-discrimination obligation conferred upon entrepreneurs does not 
require a dominant market position in order to be applied. 

Austria 

Contributions to promotional or marketing costs as an UTP. 

Belgium 

Bulgaria 

Est interdit, tout acte contraire aux pratiques honnêtes du marché par lequel une entreprise porte atteinte ou peut porter atteinte 
aux intérêts professionnels d'une ou de plusieurs autres entreprises 

Plus: specific provisions on infringements of precontractual information duties, misleading or aggressive advertisement, 
unsolicited offers, pyramidal sales.  

Bulgarian Law on Protection of Competition (LPC), Art. 37a 
Art. 37a. (new - SG 56 of 2015) (1) Every act or omission of an undertaking with a stronger bargaining position shall be 
prohibited, where it is in conflict with the fair business practice and is damaging or can impair the interests of the weaker part in 
negotiations or of consumers. Unfair shall be acts or omission which do not have objective economic grounds, such as 
unjustified refusal to be delivered or purchased goods or services, imposition of unreasonably heavy or discriminatory 

206 

Act on the Improvement 
of Local Supply and 
Market Conditions (Local 
Supply Act, Bundesgesetz 
vom 29. Juni 1977 zur 
Verbesserung der 
Nahversorgung und der 
Wettbewerbsbedingungen, 
StF: BGBl. Nr. 392/1977 
(NR: GP XIV IA 4/A und 
12/A AB 565 S. 61. BR: 
AB 1689 S. 366 
Code de droit 
économique, Livre VI, 
TITRE 4, CHAPITRE 2. 
[Pratiques du marché 
déloyales à l'égard de 
personnes autres que les 
consommateurs], Art. 
VI.104-109; Inséré par L 
2013-12-21/23, art. 3, 
009, En vigueur: 31-05-
2014 
Bulgarian Law on 
Protection of Competition 
(LPC), Art. 37a 
Art. 37a. (new - SG 56 of 
2015) (1) 

 
 
 
 
 
 
 
 
 
Countries 

Text/summary 

Legisl. ref. 

conditions or ungrounded termination of business relations. 
(2) The existence of a stronger bargaining position shall be determined in view of characteristics of the 
structure of the relevant market and particular legal relationship between the involved undertakings, taking into consideration 
the level of dependence between them, the nature of their business and the difference in the scale thereof, the probability of 
finding of an alternative trade partner, including the existence of alternative supply sources, distribution channels and/or 
customers. 

Foodstuffs Act 
Article 19. (1)  
The contract for purchase of food for resale cannot: 
1. contain a prohibition or a restriction on a party to the contract to offer or purchase goods and services of or from third 
persons; 
2. contain a prohibition or a restriction on a party to the contract to offer the same or better terms of trade to third persons; 
3. envisage sanctions in the case of provision of the same or better terms of trade to third persons; 
4. be amended unilaterally, unless this is explicitly provided for in the contract; 
5. envisage remunerations for services which have not been actually provided; 
6. envisage the shifting of unjustified or disproportionate trade risk onto one of the parties; 
7. envisage a payment time limit longer than 30 days from the date of receiving the invoice for delivery or another invitation for 
payment. When the invoice or invitation is received prior to receiving the goods, the time limit shall begin elapsing from the day 
following the day of receiving the goods, regardless of the fact that the invoice or invitation for payment dates prior to that; 
8. contain a prohibition or a restriction on a party to the contract to assign receivables to third parties. 
(2) All arrangement in violation of Paragraph 1 shall be null and void. 

Abuse the superior bargaining power. 

The UTPs in the production, processing and/or sales of agri or food products that are imposed on the suppliers by the abuse 
of the superior bargaining power are as follows: 
the provisions under written agreements between the buyers and/or processors or re-sellers and their suppliers that do not comply 
with the provisions of the UTPs Act, or obligations imposed on the suppliers that are not provided under the written agreement 
between the buyers and/or processors or re-sellers and their suppliers; 
payments that are not clearly identified and specified on the receipt or the goods receipt note; 
general terms of business of the buyer and/or processor or re-seller that are not in compliance with the provisions of the UTPs 
Act; 
possible unilateral oral termination by the buyer and/or processor or re-seller of the contract with the supplier or without 
justifiable reasons for termination, or possible cancellation of the contract with the supplier without a reasonable notice period, or 
possible unilateral or retroactive changes to contract terms by the buyer and/or processor or re-seller; 
disproportionately high contractual sanctions relating to the value and significance of the subject of obligation, and 
other unfair trading practices laid down under this Act. 
In the relationship between the supplier and the buyer and/or processor the UTPs Act lists nine more unfair trading 

207 

Foodstuffs Act 
Article 19. 

Act on the prohibition of 
unfair trading practices in 
the business-to-business 
food supply chain, 
Official Gazette 117/17, 
enters into force on 7 
December 2017 

Croatia 

 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

Cyprus 

Czech 
Republic 

Text/summary 
practices, such as: any non-transparent reduction in the quantity and/or value of the standard quality products, issuing of a blank 
debenture for the raw materials and manufacturing components, conditioning of the conclusion of the contract and the business 
co-operation by barter arrangements for the goods and services, unwillingness to take delivery of the agreed quantities of agri or 
food products in line with the agreed purchase dynamics, imposing charges for the conclusion of the contract with the supplier 
that are not proportionate to the administrative fees that should be borne by the supplier etc. 
In the relationship between the supplier and the re-seller the UTPs Act lists twenty four other unfair trading practices 
involving the payment of different fees, such as listing fees, slotting fees involving abuse of services linked to use of shelf space 
– unless they are linked to real services where the supplier explicitly requests from re-seller to place its product on a distinctive 
shelf in the outlet of the re-seller, fees for the return of delivered but unsold goods or fees for managing unsold merchandise and 
goods – unless these goods are delivered to the re-seller for the first time or where the supplier explicitly asked for the goods to 
be sold although the re-seller warned him in advance that due to the small turnover the expiry date of the goods concerned may 
elapse, fees for delivery of the products outside the agreed place of delivery, fees for refurbishing and conversion of the re-
seller’s outlets or warehouse space etc. 

Any abuse by one or more undertakings, of a relationship of economic dependence where an undertaking stands compared to 
that or those undertakings, which is either a client, supplier, producer, representative, distributor or commercial collaborator, 
shall be prohibited, even as far as a specific kind of products or services is concerned, and it does not have an equal alternative 
solution. This abuse of a relationship of economic dependence may, in particular, be constituted of the imposition of unfair 
trading conditions, the application of discretionary treatment, or of sudden and inexcusable interruption of long-term trade 
relationships. 
Article 3a - Particulars of a Contract 
The contract between the buyer with significant market power and the supplier must be made 
in writing and, in addition to the substantial parts, it must also include: a) The method of payment of the purchase price and the 
time for its payment, etc. (omissis) 
Article 4 - Prohibition of Abuse of Significant Market Power: 
(1) Abuse of significant market power is prohibited. 
(2) Abuse of significant market power includes, primarily: 
a) Negotiating and implementing contractual terms which create a significant imbalance in the rights 
and obligations of the Parties; 
b) Negotiating or obtaining any payment or other performance for which no service or other consideration was provided, or is 
disproportionate to the value of the actual consideration; 
c) Implementing or obtaining any payment or discount, the amount of which, or the purpose and scope of the provided 
consideration for this payment or discount, was not agreed in writing prior to the delivery of the food or provision of services, to 
which the payment or discount relates; 
d) Negotiating and implementing any pricing conditions due to which the tax document for the payment of the purchase price for 
the delivery of food does not contain the final purchase price after all agreed discounts on the purchase price, with the exception 
of pre-negotiated volume discounts; 
e) Negotiating and making payments or other considerations for the receipt of food for sale; 
f) Negotiating and implementing the maturity of the purchase price for food longer than the time specified in § 3a, item aj; 

208 

Legisl. ref. 

Protection of Competition 
Laws of 2008 and 2014, 
section 6(2) 

Act No. 395/2009 Coll., 
on Significant Market 
Power in the Sale of 
Agricultural and Food 
Products and Abuse 
Thereof 

 
 
 
 
Countries 

Text/summary 

Legisl. ref. 

g) Negotiating and exercising the right to return purchased food with the exception of a substantial breach of contract; 
h) Seeking compensation for sanctions imposed by the control authority from the supplier without the existence of its fault; 
i) Discrimination against the supplier consisting of arranging and implementing different contractual terms for the purchase or 
sale of services related to the purchase or sale of food with comparable performance, without justifiable cause; 
j) Conducting an audit or another form of control of the supplier by the buyer or a natural person or legal entity authorised by the 
buyer at the cost of the supplier, including demands for food analyses at the cost of the supplier; or 
k) The customer's failure to respect the results of official inspections of food conducted by the state surveillance authority 
Legislation implementing 2005/29/EC Directive on unfair commercial practices in BtoC relationships, extended to BtoB 
relationships  

Includes general rules and principles on unfair marketing practices, misleading advertising, comparative advertising, unsolicited 
offers and the like. 

No annex of prohibited practices included. 

No specific UTP legislation 
National expert refers that no legislation exists. The text below is not uptodated (implementation of Directive 2005/29/EC is not 
included) 
Section 1 
Good business practice may not be violated nor may practices that are otherwise unfair to other entrepreneurs be used in 
business. 
The commercial purpose of marketing and the party on whose behalf the marketing is done shall clearly appear from the 
marketing. (461/2002) 
Section 2 
A false or misleading expression concerning one’s own business or the business of another may not be used in business if the 
said expression is likely to affect the demand for or supply of a product or harm the business of another. 
An expression that refers to irrelevant circumstances or that is presented or formulated in an unsuitable manner may not be used 
in business if the said expression is likely to harm the business of another. 
L.442-6 
I. - Engage la responsabilité de son auteur et l'oblige à réparer le préjudice causé le fait, par tout producteur, commerçant, 
industriel ou personne immatriculée au répertoire des métiers: 
1° D'obtenir ou de tenter d'obtenir d'un partenaire commercial un avantage quelconque ne correspondant à aucun service 
commercial effectivement rendu ou manifestement disproportionné au regard de la valeur du service rendu. Un tel avantage peut 
notamment consister en la participation, non justifiée par un intérêt commun et sans contrepartie proportionnée, au financement 
d'une opération d'animation ou de promotion commerciale, d'une acquisition ou d'un investissement, en particulier dans le cadre 
de la rénovation de magasins, du rapprochement d'enseignes ou de centrales de référencement ou d'achat ou de la rémunération 

209 

Consolidated Marketing 
Practices Act, 
Consolidated Act no. 58 
of 20 January 2012 as 
amended by section 33 of 
Act no. 1231 of 18 
December 2012, section 5 
of Act no. 1387 of 23 
December 2012 and 
section 1 of Act no. 378 of 
17 April 2013 

Unfair Business Practices 
Act 
(1061/78 amendments up 
to 461/2002 included) 

Article L. 442-6 (I, II) du 
code de commerce: 
unfair practices and unfair 
terms. 

Art. L 441-6: 
precontractual information 
duties 

Denmark 

Estonia 

Finland 

France 

 
 
 
 
 
 
 
 
Countries 

Legisl. ref. 

Art. L. 441-7: framework 
distribution contracts  

Art. L. 441-8: duration 
contracts and price 
renegotiation in food 
market 

Art. L. 441-9: 
subcontracting 

Art. L 442-9: excessively 
low price sales imposed 
by buyer (in general and 
in the food sector) 

Art.L. 443-1: payment 
terms and practices 

Text/summary 
de services rendus par une centrale internationale regroupant des distributeurs. Un tel avantage peut également consister en une 
globalisation artificielle des chiffres d'affaires, en une demande d'alignement sur les conditions commerciales obtenues par 
d'autres clients ou en une demande supplémentaire, en cours d'exécution du contrat, visant à maintenir ou accroître abusivement 
ses marges ou sa rentabilité; 
2° De soumettre ou de tenter de soumettre un partenaire commercial à des obligations créant un déséquilibre significatif dans les 
droits et obligations des parties; 
3° D'obtenir ou de tenter d'obtenir un avantage, condition préalable à la passation de commandes, sans l'assortir d'un engagement 
écrit sur un volume d'achat proportionné et, le cas échéant, d'un service demandé par le fournisseur et ayant fait l'objet d'un 
accord écrit; 
4° D'obtenir ou de tenter d'obtenir, sous la menace d'une rupture brutale totale ou partielle des relations commerciales, des 
conditions manifestement abusives concernant les prix, les délais de paiement, les modalités de vente ou les services ne relevant 
pas des obligations d'achat et de vente; 
5° De rompre brutalement, même partiellement, une relation commerciale établie, sans préavis écrit tenant compte de la durée de 
la relation commerciale et respectant la durée minimale de préavis déterminée, en référence aux usages du commerce, par des 
accords interprofessionnels. Lorsque la relation commerciale porte sur la fourniture de produits sous marque de distributeur, la 
durée minimale de préavis est double de celle qui serait applicable si le produit n'était pas fourni sous marque de distributeur. A 
défaut de tels accords, des arrêtés du ministre chargé de l'économie peuvent, pour chaque catégorie de produits, fixer, en tenant 
compte des usages du commerce, un délai minimum de préavis et encadrer les conditions de rupture des relations commerciales, 
notamment en fonction de leur durée. Les dispositions qui précèdent ne font pas obstacle à la faculté de résiliation sans préavis, 
en cas d'inexécution par l'autre partie de ses obligations ou en cas de force majeure. Lorsque la rupture de la relation 
commerciale résulte d'une mise en concurrence par enchères à distance, la durée minimale de préavis est double de celle résultant 
de l'application des dispositions du présent alinéa dans les cas où la durée du préavis initial est de moins de six mois, et d'au 
moins un an dans les autres cas; 
6° De participer directement ou indirectement à la violation de l'interdiction de revente hors réseau faite au distributeur lié par un 
accord de distribution sélective ou exclusive exempté au titre des règles applicables du droit de la concurrence; 
7° D'imposer une clause de révision du prix, en application du cinquième alinéa du I de l'article L. 441-7 ou de l'avant-dernier 
alinéa de l'article L. 441-7-1, ou une clause de renégociation du prix, en application de l'article L. 441-8, par référence à un ou 
plusieurs indices publics sans rapport direct avec les produits ou les prestations de services qui sont l'objet de la convention; 
8° De procéder au refus ou retour de marchandises ou de déduire d'office du montant de la facture établie par le fournisseur les 
pénalités ou rabais correspondant au non-respect d'une date de livraison ou à la non-conformité des marchandises, lorsque la 
dette n'est pas certaine, liquide et exigible, sans même que le fournisseur n'ait été en mesure de contrôler la réalité du grief 
correspondant; 
9° De ne pas communiquer ses conditions générales de vente, dans les conditions prévues à l'article L. 441-6, à tout acheteur de 
produits ou tout demandeur de prestations de services qui en fait la demande pour l'exercice d'une activité professionnelle; 
10° De refuser de mentionner sur l'étiquetage d'un produit vendu sous marque de distributeur le nom et l'adresse du fabricant si 
celui-ci en a fait la demande conformément à l'article L. 112-6 du code de la consommation; 
11° D'annoncer des prix hors des lieux de vente, pour un fruit ou légume frais, sans respecter les règles définies aux II et III de 
l'article L. 441-2 du présent code; 
12° De passer, de régler ou de facturer une commande de produits ou de prestations de services à un prix différent du prix 

210 

 
 
 
 
 
 
 
 
 
  
Countries 

Germany 

Greece 

Text/summary 
convenu résultant de l'application du barème des prix unitaires mentionné dans les conditions générales de vente, lorsque celles-
ci ont été acceptées sans négociation par l'acheteur, ou du prix convenu à l'issue de la négociation commerciale faisant l'objet de 
la convention prévue à l'article L. 441-7, modifiée le cas échéant par avenant, ou de la renégociation prévue à l'article L. 441-8. 
13° De soumettre ou de tenter de soumettre un partenaire commercial à des pénalités pour retard de livraison en cas de force 
majeure.  
II. - Sont nuls les clauses ou contrats prévoyant pour un producteur, un commerçant, un industriel ou une personne 
immatriculée au répertoire des métiers, la possibilité: 
a) De bénéficier rétroactivement de remises, de ristournes ou d'accords de coopération commerciale; 
b) D'obtenir le paiement d'un droit d'accès au référencement préalablement à la passation de toute commande; 
c) D'interdire au cocontractant la cession à des tiers des créances qu'il détient sur lui; 
d) De bénéficier automatiquement des conditions plus favorables consenties aux entreprises concurrentes par le cocontractant; 
e) D'obtenir d'un revendeur exploitant une surface de vente au détail inférieure à 300 mètres carrés qu'il approvisionne mais qui 
n'est pas lié à lui, directement ou indirectement, par un contrat de licence de marque ou de savoir-faire, un droit de préférence sur 
la cession ou le transfert de son activité ou une obligation de non-concurrence postcontractuelle, ou de subordonner 
l'approvisionnement de ce revendeur à une clause d'exclusivité ou de quasi-exclusivité d'achat de ses produits ou services d'une 
durée supérieure à deux ans. 
L'annulation des clauses relatives au règlement entraîne l'application du délai indiqué au huitième alinéa du I de l'article L. 441-6, 
sauf si la juridiction saisie peut constater un accord sur des conditions différentes qui soient équitables. 
(…) 
Sec. 20 of the Act against Restraints of Competition (ARC) 
§ 20 Prohibited Conduct of Undertakings with Relative or Superior Market Power 
(1) § 19(1) in conjunction with paragraph 2 no. 1 [An abuse exists in particular if a dominant undertaking as a supplier or 
purchaser of a certain type of goods or commercial services directly or indirectly impedes another undertaking in an unfair 
manner or directly or indirectly treats another undertaking differently from other undertakings without any objective 
justification] shall also apply to undertakings and associations of undertakings to the extent that small or medium-sized 
enterprises as suppliers or purchasers of a certain type of goods or commercial services depend on them in such a way that 
sufficient and reasonable possibilities of switching to other undertakings do not exist (relative market power). A 
supplier of a certain type of goods or commercial services is presumed to depend on a purchaser within the meaning of sentence 
1 if this supplier regularly grants to this purchaser, in addition to discounts customary in the trade or other remuneration, special 
benefits which are not granted to similar purchasers. 
(2) § 19(1) in conjunction with paragraph 2 no. 5 [An abuse exists in particular if a dominant undertaking as a supplier or 
purchaser of a certain type of goods or commercial services requests other undertakings to grant it advantages without any 
objective justification; in this regard particular account shall be taken of whether the other undertaking has been given plausible 
reasons for the request and whether the advantage requested is proportionate to the grounds for the request] shall also apply to 
undertakings and associations of undertakings in relation to the undertakings which depend on them. 
Article 18a specifies that abuse of economic dependence may include “the imposition of arbitrary terms in transactions, the 
implementation of discrimination or the unjustified termination of an existing commercial relationship between the undertakings 
involved, taking into account, inter alia, their previous commercial relations and commercial usage”. 
Accordingly, the Greek law covers some UTPs, and namely the abuse of economic dependence, unfair contract termination, 

211 

Legisl. ref. 

Sec. 20 of the Act against 
Restraints of Competition 
(ARC) 

Act No. 146/1914 on 
“Unfair Competition”, art. 
18a 

 
 
 
 
 
Legisl. ref. 

Act XCV of 2009 
on the prohibition of 
unfair distributor conduct 
vis-à-vis suppliers 
regarding agricultural and 
food industry products 

Countries 

Text/summary 

Hungary 

liability disclaimers, unilateral modification clauses and terms unreasonably imposing or shifting risks. 
Act XCV of 2009, Section 3 
(1) Unfair distributor conduct is prohibited. 
(2) The following are regarded as unfair distributor conduct: 
a) the establishment of such conditions for the supplier as a result of which risk is shared in a way that provides unilateral 
benefits to the trader; 
b) the application of a contractual provision, not including obligations related to defective performance, stipulating the following 
with regard to the products delivered by the supplier to the trader: 
ba) the supplier’s repurchase or retake obligation, or 
bb) repurchase or retake at a price reduced to an inappropriate extent in 
consideration of product characteristics or further usability by the supplier; 
c) the trader on its own or with the involvement of a third party collaborator transfers the costs serving the trader’s business 
interests, in particular those related to business establishment, operation and functioning, to the supplier in part or in whole; 
d) the trader on its own or with the involvement of a third party collaborator charges the supplier a fee for becoming one of the 
trader’s suppliers or for including or keeping its product in the trader’s stock; 
e) the trader on its own or with the involvement of a third party collaborator charges the supplier a fee by any legal title 
ea) for service not actually provided; 
eb) for any activity performed by the trader that is unrelated to sale to the end customer and constitutes no added service for the 
supplier, in particular for the placement of the product at a specified location in the trader’s shop if it does not constitute an added 
service for the supplier; 
ec) requiring the use of or providing services not requested by the supplier and not serving its interests; 
ed) fees for services requested by the supplier and actually provided by the 
trader are also regarded as such if they are disproportionate; 
f) the requirement of a supplier contribution to a discount provided by the trader to the end customer for a period longer than the 
discount term, even if it is a partial contribution, or a supplier’s contribution in excess of the discount rate provided to the end 
customer; 
g) if the costs resulting from sanctions imposed on the trader by authorities for any breach of law falling within the scope of the 
trader’s operation are shifted onto the supplier; 
h) if the consideration for the product is paid to the supplier later than thirty days following takeover except for the case of 
defective performance; 
i) if a discount is required for the case that payment is effected within the set deadline; 
j) if the trader disclaims the applicability of late-payment interest, default penalty and other accessory contractual obligations 
ensuring performance; 
k) with the exception of products made under the trader’s brand name, if an exclusive sale obligation is imposed on the trader 
without a proportionate consideration or if the application of the most advantageous conditions is required visà-vis the trader 
concerned relative to other traders; 
l) if a non-written contractual provision is applied between the trader and the supplier and it is not put into writing in spite of the 
supplier’s relevant request within three business days thereof; 
m) if the trader places or changes an order with the supplier regarding the product without leaving a reasonable deadline; 

212 

 
 
 
Countries 

Text/summary 

Legisl. ref. 

n) if the trader unilaterally amends the contract for an objectively unjustifiable reason that is not attributable to a circumstance 
regarded as external to the trader’s operation; 
o) if the trader fails to publish the Business Rules mentioned in paragraph (5), deviates from the published Business Rules or 
applies a condition not contained therein; 
p) if the trader restricts the supplier’s lawful trademark use. 
(3) Any contractual stipulation containing unfair distributor conduct or aiming to avoid a prohibition laid down in this Act shall 
be regarded as null and void. If the publication of the Business Rules mentioned in paragraph (5) is omitted, it shall not in itself 
result in the nullity of the provisions set forth therein. 
(2) Scope of the Regulations 
5. Both parties should conduct their trading relationships in good faith and in a fair, open and transparent manner and to respect 
the terms and conditions of the agreed contracts. 

Regulation 4: Grocery goods contracts. 
This Regulation requires retailer or wholesalers to have agreed written contracts with their suppliers, which include all the terms 
and conditions of the agreed contract. 

Regulation 5: Variation, etc. of grocery goods contracts. 
This Regulation prohibits a retailer or wholesaler from varying, terminating or renewing a contract with a supplier unless the 
contract expressly provides for such variation, termination or renewal or agreed circumstances when such variation, termination 
or renewal can occur. Specifications follow (omissis) 

CONSUMER 
PROTECTION ACT 
2007 (GROCERY 
GOODS 
UNDERTAKINGS) 
REGULATIONS 2016 
(S.I. NO. 35 OF 2016) 

Ireland 

Regulation 6: Goods or services from a third party. 
This Regulation prohibits a retailer or wholesaler from compelling (either directly or indirectly) a supplier to obtain goods or 
services from a third party from whom the retailer or wholesaler receives payment for this arrangement. Specifications follow 
(omissis) 

Regulation 9: Payment from a supplier. 
This Regulation provides that a retailer or wholesaler shall not seek payment from a supplier as a condition of stocking, 
displaying or listing the supplier’s grocery goods unless the payment is based on an objective and reasonable estimate of the cost 
of stocking, displaying or listing those grocery goods, including different considerations when dealing with an individual store or 
a multiple of stores in the retailer or wholesaler’s chain of stores. If any such payment is requested by the retailer or wholesaler, 
then the retailer or wholesaler is obliged, if requested by the supplier, to provide the supplier with an estimate of the cost of 
stocking, displaying or listing the supplier’s grocery goods and the basis for that estimate. Specifications follow (omissis) 

Regulation 10: Payment terms and conditions. 
This Regulation provides that the retailer or wholesaler shall pay the supplier within 30 days of the receipt of the supplier’s 
invoice or within 30 days of the date of delivery of the goods (whichever is the later) unless the parties make express provision 
for a different timeframe for payments in their grocery goods contract. Specifications follow (omissis) 
This Regulation is subject to the provisions of the European Communities (Late Payment in Commercial Transactions) 

213 

 
 
 
 
 
 
 
 
 
Countries 

Text/summary 
Regulations 2012 (S.I. No. 580 of 2012) which should be carefully examined by all parties. In this context, any agreed payment 
to a retailer or wholesaler by a supplier will also be subject to the provisions of S.I. No. 580 of 2012. 

Legisl. ref. 

Regulation 11: Promotions. 
This Regulation prohibits a retailer or wholesaler from compelling (either directly or indirectly) a supplier to make any payment 
in respect of the promotion of the supplier’s grocery goods in the retailer’s or wholesaler’s premises. This prohibition does not 
apply where the agreed contract between the two parties makes express provision for such payments. The Regulations further 
provide that prior to a promotion the retailer or wholesaler must give written notice (provided for in the contract) to the supplier 
specifying certain features of the promotions as follows. Specifications follow (omissis) 

Regulation 12: Payment for marketing costs 
This Regulation provides that a retailer or wholesaler shall not seek payment from a supplier for marketing costs. This 
prohibition does not apply where the agreed contract between the two parties: 
- makes express provision for such payments; 
- the payment is based on an objective and reasonable estimates of the marketing costs; and 
- any payment sought is in accordance with the agreed contract. 
If any such payment is requested by the retailer or wholesaler, then the retailer or wholesaler is obliged, if requested by the 
supplier, to provide the supplier with an estimate of marketing costs and the basis for that estimate.  Specifications follow 
(omissis) 

Regulation 13: Payment for retention, increased allocation or better positioning of shelf space. 
This Regulation prohibits a retailer or wholesaler from compelling (either directly or indirectly) a supplier to make any payment 
for the retention, increased allocation or better positioning of shelf space for the supplier’s grocery goods. This prohibition does 
not apply where the agreed contract between the two parties: 
- makes express provision for such payments; and 
- any payment sought is in accordance with the agreed contract.  
Specifications follow (omissis) 

Regulation 14: Payment for advertising or display of grocery goods. 
This Regulation prohibits a retailer or wholesaler from compelling (either directly or indirectly) a supplier to make any payment 
for the advertising or display of grocery goods of the supplier in the retailer’s or wholesaler’s premises. 

Regulation 15: Payment for wastage. 
This Regulation provides that a retailer or wholesaler shall not seek payment from a supplier for wastage. This prohibition does 
not apply where: 
- the agreed contract between the two parties makes express provision for such payments; 
- the agreed contract makes express provision for an agreed average wastage cost; 
- the grocery goods contract makes express provision for the circumstances, where wastage arises from the negligence or fault of 
the supplier, in which the supplier will be required to make a payment to cover wastage at the retailer’s or wholesaler’s premises; 

214 

 
 
 
 
 
 
 
 
Countries 

Text/summary 

Legisl. ref. 

- any payment sought is in accordance with the agreed contract; 
- the payment is based on an objective and reasonable estimates of the costs of the wastage to the retailer or wholesaler. 
These conditions are not cumulative. 
If any such payment is requested by the retailer or wholesaler, then the retailer or wholesaler is obliged, if requested by the 
supplier, to provide the supplier with an estimate of the cost of the wastage and the basis for that estimate. 
Specifications follow (omissis) 

Regulation 16: Payment for shrinkage 
This Regulation provides that a retailer shall not seek payment from a supplier for shrinkage. This prohibition does not apply 
where: 
- the agreed contract between the two parties makes express provision for such payments; 
- any payment sought is in accordance with the agreed contract; and 
- the payment is based on an objective and reasonable estimate of the costs of the shrinkage to the retailer. 
If any such payment is requested by the retailer, then the retailer is obliged, if requested by the supplier, to provide the supplier 
with an estimate of the cost of the shrinkage and the basis for that estimate. Specifications follow (omissis) 

Italy 

1.  I contratti che hanno ad oggetto la cessione dei prodotti agricoli e alimentari, ad eccezione di quelli conclusi con il 
consumatore finale, sono stipulati obbligatoriamente in forma scritta e indicano la durata, le quantità e le caratteristiche del 
prodotto venduto, il prezzo, le modalità di consegna e di pagamento. I contratti devono essere informati a principi di trasparenza, 
correttezza, proporzionalità e reciproca corrispettività delle prestazioni, con riferimento ai beni forniti. 
2.  Nelle relazioni commerciali tra operatori economici, ivi compresi i contratti che hanno ad oggetto la cessione dei beni di cui al 
comma 1, è vietato: 
a)  imporre direttamente o indirettamente condizioni di acquisto, di vendita o altre condizioni contrattuali ingiustificatamente 
gravose, nonché condizioni extracontrattuali e retroattive;  
b)  applicare condizioni oggettivamente diverse per prestazioni equivalenti;  
c)  subordinare la conclusione, l'esecuzione dei contratti e la continuità e regolarità delle medesime relazioni commerciali alla 
esecuzione di prestazioni da parte dei contraenti che, per loro natura e secondo gli usi commerciali, non abbiano alcuna 
connessione con l'oggetto degli uni e delle altre;  
d)  conseguire indebite prestazioni unilaterali, non giustificate dalla natura o dal contenuto delle relazioni commerciali;  
e)  adottare ogni ulteriore condotta commerciale sleale che risulti tale anche tenendo conto del complesso delle relazioni 
commerciali che caratterizzano le condizioni di approvvigionamento. 
3.  Per i contratti di cui al comma 1, il pagamento del corrispettivo deve essere effettuato per le merci deteriorabili entro il 
termine legale di trenta giorni e per tutte le altre merci entro il termine di sessanta giorni. In entrambi i casi il termine decorre 
dall'ultimo giorno del mese di ricevimento della fattura. Gli interessi decorrono automaticamente dal giorno successivo alla 
scadenza del termine. In questi casi il saggio degli interessi è maggiorato di ulteriori due punti percentuali ed è inderogabile. (…) 

Art. 4  Pratiche commerciali sleali 
1.  Ai fini dell'applicazione dell'articolo 62, comma 2, lettera e), del decreto-legge 24 gennaio 2012, n. 1, convertito, con 
modificazioni, dalla legge 24 marzo 2012, n. 27, nell'ambito delle cessioni di prodotti agricoli e alimentari, rientrano nella 

D.L. 24-1-2012 n. 1 
Disposizioni urgenti per la 
concorrenza, lo sviluppo 
delle infrastrutture e la 
competitività. 
Pubblicato nella Gazz. 
Uff. 24 gennaio 2012, n. 
19, S.O. 
Art. 62. Disciplina delle 
relazioni commerciali in 
materia di cessione di 
prodotti agricoli e 
agroalimentari  
In vigore dal 19 dicembre 
2012 

D.M. 19 ottobre 2012, n. 
199 
Regolamento di 
attuazione dell'articolo 62 

215 

 
 
 
 
 
 
 
 
 
 
Legisl. ref. 

del decreto-legge 24 
gennaio 2012, n. 1, 
recante disposizioni 
urgenti per la 
concorrenza, lo sviluppo 
delle infrastrutture e la 
competitività, convertito, 
con modificazioni, dalla 
legge 24 marzo 2012, n. 
27. 

Unfair Retail Trade 
Practices Prohibition Law 

Countries 

Text/summary 

definizione di "condotta commerciale sleale" anche il mancato rispetto dei principi di buone prassi e le pratiche sleali 
identificate dalla Commissione europea e dai rappresentanti della filiera agro-alimentare a livello comunitario nell'ambito del 
Forum di Alto livello per un migliore funzionamento della filiera alimentare (High level Forum for a better functioning of the 
food supply chain), approvate in data 29 novembre 2011, di cui in allegato al presente decreto. 
2.  Le disposizioni di cui all'articolo 62, comma 2, del decreto-legge 24 gennaio 2012, n. 1, convertito, con modificazioni, dalla 
legge 24 marzo 2012, n. 27, vietano qualsiasi comportamento del contraente che, abusando della propria maggior forza 
commerciale, imponga condizioni contrattuali ingiustificatamente gravose, ivi comprese quelle che: 
a)  prevedano a carico di una parte l'inclusione di servizi e/o prestazioni accessorie rispetto all'oggetto principale della fornitura, 
anche qualora queste siano fornite da soggetti terzi, senza alcuna connessione oggettiva, diretta e logica con la cessione del 
prodotto oggetto del contratto;  
b)  escludano l'applicazione di interessi di mora a danno del creditore o escludano il risarcimento delle spese di recupero dei 
crediti;  
c)  determinino, in contrasto con il principio della buona fede e della correttezza, prezzi palesemente al di sotto dei costi di 
produzione medi dei prodotti oggetto delle relazioni commerciali e delle cessioni da parte degli imprenditori agricoli. 
3.  Configura, altresì, una pratica commerciale sleale la previsione nel contratto di una clausola che obbligatoriamente imponga 
al venditore, successivamente alla consegna dei prodotti, un termine minimo prima di poter emettere la fattura, fatto salvo il caso 
di consegna dei prodotti in più quote nello stesso mese, nel qual caso la fattura potrà essere emessa solo successivamente 
all'ultima consegna del mese. 
Section 5. Prohibited Activities 
A retailer is prohibited to perform activities, which are in contradiction with fair practice of economic activity and by which 
operational risk of a retailer is imposed on suppliers, additional duties are imposed or the possibility of free operation in the 
market is restricted. 
Section 6. Prohibited Activities in Retail Trade of Food Products 
(1) It is prohibited to bring forward the following requirements to a supplier in retail trade of food products: 
1) to pay directly or indirectly or otherwise reimburse for entering into a contract; 
2) to pay directly or indirectly for the goods being present at a retail selling point, including for placing of goods in store shelves, 
except the case when the retailer and the supplier have entered into a written agreement that it will be paid for additional 
arrangement of the goods in special places; 
3) to compensate the profit not obtained by the retailer from selling the goods supplied by the supplier; 
4) to compensate the costs of the retailer related to arranging new stores or restoring the old stores, including to perform unfair 
and unjustified payment for the delivery of goods to a retail selling point to be newly opened; 
5) to purchase goods, services or property from the third person indicated by the retailer, except the case when it has an objective 
justification and entered into a separate written agreement regarding purchase of such goods or services; 
6) to ensure the lowest price by restricting the freedom of the supplier to agree on a lower price with another retailer; 
7) to change the specifications of goods, including assortment if the supplier has not been notified thereof within the time period 
specified in the contract, which may be not less than 10 days; 
8) to take back the unsold food products, except goods of poor quality and new goods unknown to consumers, the initiator of the 
supply or increase in the amount of which is the supplier; 
9) to pay directly or indirectly to a retailer for sales promotion measures or to otherwise reimburse all costs of such measures or 

216 

Latvia 

 
 
 
 
Countries 

Text/summary 

Legisl. ref. 

part of them, except the case when the retailer has entered into a written agreement with the supplier regarding sales promotion 
measures; 
10) to compensate the costs related to examining complaints of consumers, except the case when justified complaints of 
consumers arise from circumstances, for which the supplier is responsible; 
11) to determine unfair and unjustified sanctions for the violation of contractual provisions; 
12) to perform unfair, unjustified payments (discounts) or payments (discounts) not provided for in the contract, except the case 
when the retailer has agreed with the supplier regarding bulk discount (discount applied depending on the amount of the goods 
ordered) or campaign discount (discount applied for a limited and indicated period of time for promoting the sale of goods); 
13) to compensate the costs of a retailer, which are related to the costs of logistics services of the retailer, except the case when 
the retailer has entered into a written agreement with the supplier regarding distribution of goods; 
14) to compensate the costs of a retailer, which are related to its administration costs. 
(2) A campaign discount shall not be applied to goods not sold during sales promotion of goods, except the case when the retailer 
has entered into a written agreement with the supplier regarding application of campaign discount to goods not sold during sales 
promotion of goods. 
(3) A retailer is not entitled: 
1) not to accept food products from a supplier, which are valid for use for at least two thirds of the expiration date, if such term 
exceeds 30 days; 
2) to change the order of food products two days before the delivery of goods or later. 
Article 3. Prohibition of unfair practices 
1. Retailers shall be prohibited from carrying out any actions contrary to fair business practices whereby the operational risk of 
the retailers is transferred to suppliers or they are imposed additional obligations or which limit the possibilities of suppliers to 
freely operate in the market and which are expressed as requirements for the supplier: 
1) to pay directly or indirectly or remunerate in any other way for consent to start trading in the supplier’s goods (“entry” fees); 
2) to compensate for the lost or smaller-than-expected income of the retailer from the sale of goods received from the supplier; 
3) to compensate for the operational costs of the retailer related to equipping new stores or renovating the old ones; 
4) to acquire goods, services or assets from third parties specified by the retailer; 
5) to tie the prices of goods supplied to the retailer as well as the supply conditions to the supplier’s prices of goods and supply 
conditions applied to third parties; 
6) to change the basic supply procedures or goods specifications without notifying the supplier thereof within the time limit 
specified in the agreement, which may not be shorter than ten days; 
7) to accept unsold food products, except for non-perishable packaged food products if they are safe, high-quality and at least 1/3 
of time before their expiration date remains or they have no expiration date and there is a prior agreement in relation to their 
return; 
8) to pay directly or indirectly a part of the costs of sales promotion carried out by the retailer or together with it or to 
compensate for such costs in any other way, except for the cases where there is a written agreement between the retailer and the 
supplier regarding the amount of costs to be paid and sales promotion activities to be applied; 
9) to compensate for the expenses incurred while investigating consumer complaints, except for the cases where a justified 
consumer complaint was due to the circumstances which are the responsibility of the supplier. In this case, the amount of 
expenses which the retailer requests the supplier to compensate for must be substantiated by the actual expenses of the retailer; 

217 

Lithuania 

REPUBLIC OF 
LITHUANIA 
LAW ON THE 
PROHIBITION OF 
UNFAIR PRACTICES 
OF RETAILERS 
22 December 2009 – No 
XI-626 
Vilnius (As last amended 
by 17 December 2015 – 
No XII-2204) 

 
 
 
 
Countries 

Text/summary 

Legisl. ref. 

10) to pay directly or indirectly or to compensate for the arrangement of goods, except for the cases where there is a written 
agreement between the retailer and the supplier regarding payment for the arrangement of goods. 
2. Where a supplier establishes in the agreement a commercial rebate expressed as a fixed amount of money which is not tied to 
the sale, quality, logistics (distribution and delivery of goods), sales promotion and/or other conditions of purchase and sale of 
the goods and where a retailer requests to accept the unsold food products (acceptance of which is not prohibited under point 7 of 
this paragraph), for which the commercial rebate on such products expressed as a fixed amount of money has already been 
received, the retailer shall be prohibited from refusing to return to the supplier the share of the commercial rebate, expressed as a 
fixed amount of money, in proportion to the returned food products. 
3. In the course of investigation of infringements of this Law (hereinafter: 'investigation of an infringement'), the duty to prove 
that the agreement referred to in points 7, 8 and 10 of paragraph 1 of this Article has been concluded and meets the set 
requirements shall fall on the retailer which has concluded such an agreement. 
No specific UTP legislation 
No specific UTP legislation 
No specific UTP legislation 

Using the contractual advantage is unfair if it is contrary to the principles of morality and threatens the essential interest 

Unfair use of contractual advantage consists of particular in: 
unjustified termination or the threat of termination of the contract. 
award only one side of the right to dissolve, withdraw from or terminate the contract; 
make the conclusion or continuation of the contract subject to the acceptance or performance by either party of other 

Article 6. it is prohibited to use unfair contractual advantage vis-à-vis the supplier and purchaser of the supplier towards the 
purchaser. 
Article 7 1. The contractual advantage within the meaning of this Act, is the purchaser against the supplier in which there is not 
enough for the supplier and the actual possibility of disposing of other agricultural products or foodstuffs to buyers and there is a 
significant gender imbalance in economic power in favour of the buyer or supplier towards the buyer, the buyer there is 
insufficient and the actual scope for acquisition of agri/food products from other suppliers and there is a significant gender 
imbalance in economic power in favour of the supplier. 
2. 
of the other part or violates such an interest. 
3. 
1) 
2) 
3) 
services not materially or causally linked to the object of the contract; 
4) 
Decree-Law (DL) No. 166/2013, of 27.12, changed by Decree-Law (DL) No. 221/2015, of 8.10 prohibits: 
(i) 
Discriminating prices or selling conditions, but insofar they are not compatible with competition rules (Article 3); 
(ii) 
Prices and selling conditions which are not included in the general buyer/seller contractual agreement (Article 4); 
(iii) 
Sales below cost (Article 5); 
(iv) 
Refusal of selling or of supplying services (Article 6); and 
Abusive commercial practices such as: imposing to a counter-party the impossibility of selling to any other company at 
(v) 
a lower price; imposing disproportionate payments or other terms; retroactive changes in contracts and imposition of conditions 
by unilateral decision (Article 7). 
This Decree-Law, whose scope is transversal, also carries specific provisions for the agri-food sector, specifically when the 

unjustified lengthening payment periods for agricultural and food products supplied. 

OJ 2017 Item 67 ACT of 
15 December 2016 to 
prevent the fraudulent use 
of contractual advantage 
in trade in agricultural 
products and groceries 

Decree-Law (DL) No. 
166/2013, of 27.12, 
changed by Decree-Law 
(DL) No. 221/2015, of 
8.10 (in order to provide 
certain clarifications), on 
“individual restrictive 
commercial practices”, 
which has revoked 

218 

Luxembourg 
Malta 
(The) 
Netherlands 

Poland 

Portugal 

 
 
 
 
 
 
 
 
Countries 

Text/summary 

For costs related to transport and warehousing subsequent to the delivery of the products; 
As a contribution for opening new establishments or refurbishment of the existing ones;  
As a condition to start a business relationship. 

The returning or rejection of products without objective reasons; 
The imposition of direct payments or discounts on the purchase price: 
In case the expected volume of sales is not reached; 
For introduction or reintroduction of products; 
As a compensation for costs related to consumer complaints (unless the complaint was due to the supplier’s negligence); 
To cover any wastage of supplier products, unless the buyer demonstrates that such is due to negligence, tort or breach 

supplier is a micro or a small enterprise, prohibiting the following terms that unreasonably shift commercial risk onto the small 
supplier (Article 7 (3)) :   
(i) 
(ii) 
a. 
b. 
c. 
d. 
of contract by the supplier; 
e. 
f. 
g. 
Article 6 
It is prohibited any retailer to ask providers to other merchants not to sell the same products at a cost of acquisition less than or 
equal to that of purchased products. 
Article 7 
(1) Except where the delisting is due to fault of the supplier contract, delisting the merchant supplier of a product must be made 
by written notification prior two months before the date of delisting. 
(2) unilateral delisting retailer undertakes to refund the entire amount of money received by it from the supplier to assume the 
contractual obligation of listing. 
(3) The trader may refuse receipt of the goods given that this does not meet legal marketing, stated in the contract or order, or 
delays, notifying in writing the reason for refusal reception supplier product within 24 hours, in otherwise the goods are 
considered accepted. 
(4) If the parties agree by contract that quantitative and qualitative reception to be made after the time of delivery, the receiving 
document will be submitted in writing provider within 48 hours of the availability of the commodity trader. 
Chapter III - Obligations of pay between retailer and supplier of food 
Article 8 
Between retailer and supplier payment is made on the date agreed by the parties in agreement, as follows: 
a) fresh food merchant payment term of the provider contracted and delivered products may not be longer than 12 days; 
b) frozen food merchant payment term of the PARTY contracted and delivered products may not be longer than 20 days; 
c) Food products other than the letter prevented. a) and b) the period for payment of the merchant provider contracted and 
delivered products may not be longer than 35 days. 
Article 9 
In case of failure or improper performance of contractual obligations by either party, they may provide in the contract payment of 
penalties by the defaulting party, equal parts, their amount being negotiated at contract completion date. 
Article 10 
If payment is not made on time, the debtor is in default without any further formality and at that time paid a penalty equal to 
twice the daily interest of the National Bank of Romania, calculated the amount due. 
Slovak legal system has determined inadequate conditions. The amendment to the Trade Law No. 9/2013, effective as from 

219 

Romania 

Slovakia 

Legisl. ref. 
previous legislation on the 
same area (DL 370/93, of 
29.10, with the 
amendments introduced 
by DL 140/98, of 16.05) 

Law 321/2009 on food 
marketing. Law no. 
321/2009 

Act No. 326/2012 on 

 
 
 
 
Countries 

Text/summary 

February 1, 2013, has introduced the concept of “unfair contractual condition” and “unfair trade practice” in the Trade Law (§ 
369d). 
“Unfair contractual condition” is defined as contractual arrangement related to maturity of financial commitment, delay interest 
rate or flat-rate reimbursement of the costs related to enforcement of account receivable which is in serious disproportion to the 
rights and obligations resulting from commitment relation for creditor without existing equitable reason. Such contractual 
arrangement is invalid. 
“Unfair trade practice” is defined as trade practice introduced between the parties related to maturity of financial commitment, 
delay interest rate or flat-rate reimbursement of the costs related to enforcement of account receivable which is in serious 
disproportion to the rights and obligations resulting from commitment relation for creditor without existing right-minded 
(equitable) reason. Unfair trade practice is forbidden.  
With regard to relations between suppliers and purchasers subject of which are foodstuffs and where is accurate definition of 
foodstuffs, the Act No. 326/2012 on unreasonable conditions in trade relations subject of which are foodstuffs entered into force 
on January 1, 2013. The act has been covering only the sphere of trade relations with foodstuffs and has been determining 44 
unreasonable conditions for which any contractual party, benefiting from agreed unreasonable condition, may be fined. The 
Ministry of Agriculture and Rural Development of the SR is the inspection body. 
Upon the act, unreasonable condition is understood as financial/non-financial fulfilment without adequate counter-value/counter-
fulfilment. 
The Slovak Act on UTPs covers the trading practices related to food only and it lays down 44 UTPs. Nevertheless, there are 
other UTPs being applied in the supply chain which are not covered by the Act, e.g. enforcement of services free of charge, 
enforcement of unfair promotion fees, enforcement of practices according to which the ownership of goods remains with the 
supplier until the goods are sold to third parties by the retailer (the retailer does not take legal responsibility for the goods), 
enforcement of exchange of goods or their withdrawal from sale before the best-before date, enforcement of sale of supplier`s 
goods under the retailer`s trademark, payment not made within the contractual or statutory period of payment etc. 
Illegal practices are those practices by which one party with their significant market power, exploits the other party. Significant 
market power is evident from the volume or value of sales, contrary to good business practice. 
Illegal practices are:  
- Failure to comply with the legislative payment deadlines, 
- The imposition of conditions in particular: additional payments or discounts, promotions or other services, unfair terms of 
delivery, offset by non-competitive conditions, additional payments for achieving or failure to achieve certain levels of sales, 
unconditional return of unsold goods. 
The payment period for quickly perishable food should not be longer than 45 days from the reception of the goods   
Different agreement on the length of the payment period for quickly perishable food is null and void.  
Illegal practices are: the imposition of conditions in particular: additional payments for achieving or failure to achieve certain 
levels of sales, unconditional return of unsold goods; additional payments or discounts, promotions; unfair terms of delivery, 
offset by non-competitive conditions. 
Article 4. Guiding Principles. 
The commercial relations subject to this Act shall be governed by the principles of balance and fair reciprocity between parties, 
freedom to enter into agreements, goodwill, mutual interest, equitable sharing of risks and responsibilities, cooperation, 
transparency and respect for free market competition. 

220 

Slovenia 

Spain 

Legisl. ref. 
unreasonable conditions 
in trade relations subject 
of which are foodstuffs 
entered into force on 
January 1, 2013 
(quoted source: response 
to Green Paper 
consultation from S.R. 
Ministry of Agriculture) 

Act on Changes and 
Amendments to the 
Agriculture Act OJ - 
26/14 on 14 April 2014. 

Law 12/2013, of 2 
August, measures to 
improve the functioning 
of the food supply chain. 

 
 
 
 
Countries 

Text/summary 

Legisl. ref. 

Article 9. Contract conditions. 
1. Food procurement contracts regulated in this Chapter shall contain at least the following 
information: (omissis) c) Price of the contract, with express indication of all payments, including applicable discounts, 
determined in fixed or variable amounts. In this latter case, variable amounts shall be determined based solely on objective, 
verifiable and non-manipulable factors and explicitly laid down in the contract. These may include, inter alia, the evolution of the 
market situation, volume delivered and the quality or composition of the product. d) Payment conditions. (omissis) h) Duration 
of the contract and conditions of renewal and modification. i) Causes, formalisation and effects of contract termination. 
Unfair business practices 
Article 12. Unilateral changes and unforeseen commercial payments. 
1. Modification of established contractual terms, unless by mutual agreement of the parties, is prohibited. Food procurement 
contracts must contain appropriate clauses laying down the procedure for possible modification and, where appropriate, for the 
determination of retroactive application. 
2. Additional payments over the agreed price are prohibited, unless they are to cover the reasonable risk of referencing a new 
product or the partial financing of the marketing of a product reflected in the unitary retail price and have been agreed and 
explicitly included in the contract concluded in writing, together with a description of what said payments are for. 
3. The contract must stipulate the refund mechanism for the return of payments where services or promotion or similar activities 
were not carried out by the deadline and under the agreed terms and conditions. 
Code of Good Business Practices in Food Procurement Contracting 
Article 15. Purpose, scope and development. 
1. The Ministry of Agriculture, Food and Environmental Affairs, organisations and associations above the Autonomous 
Community level and representatives of production operators, industry and distribution, shall come to an agreement on a Code of 
Good Business Practices in Food Procurement Contracting. The Ministry of Economy and Competitiveness and the Autonomous 
Communities shall also participate in the said agreement in order to promote the uniform application of the code throughout 
national territory. 
2. The Code shall establish the principles on which to base commercial relations between the different operators involved in the 
chain with a view to facilitating the development of contractual relations, observance of best practices in the building of these 
relations and their adaptation to the rules and principles contained in Article 4 of this law. The Code shall also list those business 
practices that promote fair, balanced and loyal relationships between food supply chain operators. 
3. Adherence to the Code of good business practices is voluntary for operators in the different areas of the food supply chain 
referred to in paragraph 1 of this Article. 
4. Once committing to the Code, operators must adapt their commercial relations to its principles and rules and the use of the 
systems defined to settle disputes that may arise in such relationships, following the procedures established therein. 
General clause and open terms in definition of unfair, misleading and aggressive practices complemented by list of per se 
prohibited practices (annex I of the Directive) 
Section 5 
Marketing shall be consistent with good marketing practice. 
Section 6 
Marketing that contravenes good marketing practice under Section 5 is to be regarded as unfair if it appreciably affects or 
probably affects the recipient’s ability to make a well-founded transaction decision. 

221 

Sweden 

The Marketing Act 
(2008:486), 
implementation of 
Directive 2005/29/EC; 
annex I (list of unfair 
practices practices) made 
applicable to BtoB as 

 
 
 
Countries 

Text/summary 

United 
Kingdom 

Aggressive marketing 
Section 7 
A trader may not use aggressive marketing. 
Marketing is to be regarded as aggressive if it involves harassment, coercion, physical violence, threats or other aggressive ways 
of bringing pressure to bear. 
Aggressive marketing is to be regarded as unfair if it appreciably affects or probably affects the recipient’s ability to make a 
well-founded transaction decision. 
Aggressive marketing as specified in points 24–31 of Annex I to Directive 2005/29/EC are always to be regarded as unfair. 
Misleading marketing 
Section 8 
Marketing that is misleading under any of the provisions of Sections 9, 10 or 12-17 is to be regarded as unfair if it affects or 
probably affects the recipient’s ability to make a well-founded transaction decision. 
PART 2—FAIR DEALING 
2. Principle of fair dealing. A Retailer must at all times deal with its Suppliers fairly and lawfully. Fair and lawful dealing will be 
understood as requiring the Retailer to conduct its trading relationships with Suppliers in good faith, without distinction between 
formal or informal arrangements, without duress and in recognition of the Suppliers’ need for certainty as regards the risks and 
costs of trading, particularly in relation to production, delivery and payment issues. 
PART 3—VARIATION. 3. Variation of Supply Agreements and terms of supply. (1) Subject to paragraph 3(2), a Retailer must 
not vary any Supply Agreement retrospectively, and must not request or require that a Supplier consent to retrospective 
variations of any Supply Agreement. 
(2) A Retailer may make an adjustment to terms of supply which has retroactive effect where the relevant Supply Agreement sets 
out clearly and unambiguously: (a) any specific change of circumstances (such circumstances being outside the Retailer’s 
control) that will allow for such adjustments to be made; and 
(b) detailed rules that will be used as the basis for calculating the adjustment to the terms of supply. 
(3) If a Retailer has the right to vary a Supply Agreement unilaterally, it must give Reasonable Notice of any such variation to the 
Supplier. 
4. Changes to supply chain procedures. A Retailer must not directly or indirectly Require a Supplier to change significantly any 
aspect of its supply chain procedures during the period of a Supply Agreement unless that Retailer either: (a) gives Reasonable 
Notice of such change to that Supplier in writing; or 
(b) fully compensates that Supplier for any net resulting costs incurred as a direct result of the failure to give Reasonable Notice. 
PART 4—PRICES AND PAYMENTS 
5. No delay in Payments 
A Retailer must pay a Supplier for Groceries delivered to that Retailer’s specification 
in accordance with the relevant Supply Agreement, and, in any case, within a 
reasonable time after the date of the Supplier’s invoice. 
6. No obligation to contribute to marketing costs 
Unless provided for in the relevant Supply Agreement between the Retailer and the 
Supplier, a Retailer must not, directly or indirectly, Require a Supplier to make any 
Payment towards that Retailer’s costs of: 

222 

Legisl. ref. 

well. 

THE GROCERIES 
(SUPPLY CHAIN 
PRACTICES) MARKET 
INVESTIGATION 
ORDER 2009 

On 9 May 2006, the 
Office of Fair Trading, in 
the exercise of its powers 
under section 131 of the 
Enterprise Act 2002 (the 
Act), referred to the 
Competition Commission 
(CC), for investigation 
and report, the supply of 
groceries by retailers in 
the UK. On 30 April 2008 
the CC published a report 
on the investigation and it 
contained the decision that 
there were adverse effects 
on competition. 
On 26 February 2009 the 
CC gave notice of its 
intention to make this 
order in accordance with 
paragraph 2 of Schedule 

 
 
 
 
Countries 

Text/summary 

(a) buyer visits to new or prospective Suppliers; 
(b) artwork or packaging design; 
14 
(c) consumer or market research; 
(d) the opening or refurbishing of a store; or 
(e) hospitality for that Retailer’s staff. 
7. No Payments for shrinkage 
A Supply Agreement must not include provisions under which a Supplier makes 
Payments to a Retailer as compensation for Shrinkage. 
8. Payments for Wastage 
A Retailer must not directly or indirectly Require a Supplier to make any Payment to 
cover any Wastage of that Supplier’s Groceries incurred at that Retailer’s stores 
unless: 
(a) such Wastage is due to the negligence or default of that Supplier, and the 
relevant Supply Agreement sets out expressly and unambiguously what will 
constitute negligence or default on the part of the Supplier; or 
(b) the basis of such Payment is set out in the Supply Agreement. 
9. Limited circumstances for Payments as a condition of being a Supplier 
A Retailer must not directly or indirectly Require a Supplier to make any Payment as 
a condition of stocking or listing that Supplier’s Grocery products unless such 
Payment: 
(a) is made in relation to a Promotion; or 
(b) is made in respect of Grocery products which have not been stocked, displayed 
or listed by that Retailer during the preceding 365 days in 25 per cent or more of 
its stores, and reflects a reasonable estimate by that Retailer of the risk run by 
that Retailer in stocking, displaying or listing such new Grocery products. 
10. Compensation for forecasting errors 
(1) A Retailer must fully compensate a Supplier for any cost incurred by that Supplier 
as a result of any forecasting error in relation to Grocery products and attributable 
to that Retailer unless: 
(a) that Retailer has prepared those forecasts in good faith and with due care, 
and following consultation with the Supplier; or 
(b) the Supply Agreement includes an express and unambiguous provision that 
full compensation is not appropriate. 
(2) A Retailer must ensure that the basis on which it prepares any forecast has been 
communicated to the Supplier. 
15 
11. No tying of third party goods and services for Payment 
(1) A Retailer must not directly or indirectly Require a Supplier to obtain any goods, 

223 

Legisl. ref. 

10 to the Act as applied 
by section 165 of the Act. 
Following consultation, 
the CC made 
modifications to the order 
and issued a further notice 
of its intention to make 
this order in accordance 
with paragraph 5 of 
Schedule 10 to the Act. 
The CC, in accordance 
with section 138 of the 
Act and in exercise of the 
powers conferred by 
sections 161 and 164 and 
Schedule 8, and for the 
purpose of remedying, 
mitigating or preventing 
the adverse effects on 
competition concerned 
and for the purpose of 
remedying, mitigating or 
preventing detrimental 
effects on customers so 
far as they have resulted 
from, or may be expected 
to result from, the adverse 
effects on competition, 
makes the following 
Order. 

 
 
 
Countries 

Text/summary 

Legisl. ref. 

services or property from any third party where that Retailer obtains any Payment 
for this arrangement from any third party, unless the Supplier’s alternative source 
for those goods, services or property: 
(a) fails to meet the reasonable objective quality standards laid down for that 
Supplier by that Retailer for the supply of such goods, services or property; or 
(b) charges more than any other third party recommended by that Retailer for the 
supply of such goods, services or property of an equivalent quality and 
quantity. 
PART 5—PROMOTIONS 
12. No Payments for better positioning of goods unless in relation to 
Promotions 
A Retailer must not directly or indirectly Require a Supplier to make any Payment in 
order to secure better positioning or an increase in the allocation of shelf space for 
any Grocery products of that Supplier within a store unless such Payment is made in 
relation to a Promotion. 
13. Promotions 
(1) A Retailer must not, directly or indirectly, Require a Supplier predominantly to 
fund the costs of a Promotion. 
(2) Where a Retailer directly or indirectly Requires any Payment from a Supplier in 
support of a Promotion of one of that Supplier’s Grocery products, a Retailer 
must only hold that Promotion after Reasonable Notice has been given to that 
Supplier in writing. For the avoidance of doubt, a Retailer must not require or 
request a Supplier to participate in a Promotion where this would entail a 
retrospective variation to the Supply Agreement. 
14. Due care to be taken when ordering for Promotions 
(1) A Retailer must take all due care to ensure that when ordering Groceries from a 
Supplier at a promotional wholesale price, not to over-order, and if that Retailer 
fails to take such steps it must compensate that Supplier for any Groceries overordered 
and which it subsequently sells at a higher non-promotional retail price. 
(2) Any compensation paid in relation to paragraph 14(1) above will be the difference 
between the promotional wholesale price paid by the Retailer and the Supplier’s 
non-promotional wholesale price. 
(3) A Retailer must ensure that the basis on which the quantity of any order for a 
Promotion is calculated is transparent. 
15. No unjustified payment for consumer complaints 
(1) Subject to paragraph 15(3) below, where any consumer complaint can be 
resolved in store by a Retailer refunding the retail price or replacing the relevant 
Grocery product, that Retailer must not directly or indirectly Require a Supplier to 
make any Payment for resolving such a complaint unless: 

224 

 
 
 
Countries 

Text/summary 

Legisl. ref. 

(a) the Payment does not exceed the retail price of the Grocery product charged 
by that Retailer; and 
(b) that Retailer is satisfied on reasonable grounds that the consumer complaint 
is justifiable and attributable to negligence or default or breach of a Supply 
Agreement on the part of that Supplier. 
(2) Subject to paragraph 15(3) below, where any consumer complaint cannot be 
resolved in store by a Retailer refunding the retail price or replacing the relevant 
Grocery product, that Retailer must not directly or indirectly Require a Supplier to 
make any Payment for resolving such a complaint unless: 
(a) the Payment is reasonably related to that Retailer’s costs arising from that 
complaint; 
(b) that Retailer has verified that the consumer complaint is justifiable and 
attributable to negligence or default on the part of that Supplier; 
(c) a full report about the complaint (including the basis of the attribution) has 
been made by that Retailer to that Supplier; and 
(d) the Retailer has provided the Supplier with adequate evidence of the fact that 
the consumer complaint is justifiable and attributable to negligence or default 
or breach of a Supply Agreement on the part of the Supplier. 
(3) A Retailer may agree with a Supplier an average figure for Payments for 
resolving customer complaints as an alternative to accounting for complaints in 
accordance with paragraphs 15(1) and 15(2) above. This average figure must not 
exceed the expected costs to the Retailer of resolving such complaints. 
16. Duties in relation to De-listing 
(1) A Retailer may only De-list a Supplier for genuine commercial reasons. For the 
avoidance of doubt, the exercise by the Supplier of its rights under any Supply 
Agreement (including this Code) or the failure by a Retailer to fulfil its obligations 
under the Code or this Order will not be a genuine commercial reason to De-list a 
Supplier. 
(2) Prior to De-listing a Supplier, a Retailer must: 
(a) provide Reasonable Notice to the Supplier of the Retailer’s decision to De-list, 
including written reasons for the Retailer’s decision. In addition to the 
elements identified in paragraph 1(1) of this Code, for the purposes of this 
paragraph ‘Reasonable Notice’ will include providing the Supplier with 
sufficient time to have the decision to De-list reviewed using the measures set 
out in paragraphs 16(2)(b) and 16(2)(c) below; 
(b) inform the Supplier of its right to have the decision reviewed by a Senior 
Buyer, as described in paragraph 17 of this Code; and 
(c) allow the Supplier to attend an interview with the Retailer’s Code Compliance 
Officer to discuss the decision to De-list the Supplier. 

225 

 
 
 
226 

 
 
 
 
 
 
2.2 Modes of regulation and prohibited unfair practices: general clauses, list of prohibited practices, contractual 
exemptions 

Does existing legislation prohibit UTP using general clauses such as general prohibition of practices breaching accepted 
standards of fairness or professional diligence? 
Does legislation provide lists of “per se” prohibited practices? 
Does legislation use open terms when defining or listing UTPs? 
Does legislation admit that contracts may exempt practices from being held unfair, merely or subject to certain conditions?  

Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

Austria 
Belgium 

Bulgaria 

Croatia 
Cyprus 
Czech 
Republic 
Denmark 
Estonia 
Finland 

France 

X 

X 

X 
X 

X 

X 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

Mainly open terms 

Greece: DG Agri survey, update: 2015 
Malta: no answer available within DG Agri survey 

X 

X 

Mainly open terms; some 
stricter standards (eg 
payment term clauses. 
Prohibition of specific 
contract clauses. 

Mainly open terms 
Open terms 

Mainly open terms 

Foodstuffs Act 
Article 19. (1) 
The contract for purchase of food for resale cannot: 
(…) 
4. be amended unilaterally, unless this is explicitly 
provided for in the contract; (…) 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 
No specific UTP legislation 
Only limited scope UTP legislation (mainly based on BtoC type UTPs 

X 

List of prohibited conducts 
through open terms 

227 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

Germany 
Greece 

Hungary 

General 
clause 
only 

X 

General clause + examples of 
prohibited practices 

X 

X (Unfair distributor conduct 
is prohibited) 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

X 
Not obvious whether the 
list is exclusive or other 
conducts may be 
deemed unfair (so 
falling under the general 
prohibition). 

Open terms v. strict 
standards 

Open terms 

List of practices is 
relatively detailed with 
more limited use of open 
terms 

Ireland 

X 
(2) Scope of the Regulations 
5. Both parties should conduct 
their trading relationships in 
good faith and in a fair, open 
and transparent manner and to 
respect the terms and 
conditions of the agreed 
contracts. 

X 

Rather detailed 
prohibitions. Open terms 
are used though to a more 
limited extent. 

228 

Contractual exemption of TPs otherwise held unfair 

(2) Scope of the Regulations 
6. Any term of a grocery goods contract which directly 
or indirectly contravenes, waives or restricts a provision 
of the Regulations is not binding or enforceable. 
Regulation 5: Variation, etc. of grocery goods contracts. 
This Regulation prohibits a retailer or wholesaler from 
varying, terminating or renewing a contract with a 
supplier unless the contract expressly provides for such 
variation, termination or renewal or agreed 
circumstances when such variation, termination or 
renewal can occur. Thus, unilateral retrospective 
variations are not permitted. In addition, the agreed 
contract must specify the period of written notice that 
must be given prior to any such variation, termination or 
renewal. The period of such notice will be reasonable 
and have regards to all the circumstances of the contract, 
including: 

retailer or wholesaler for the grocery goods concerned; 

including the durability, seasonality and external factors 
affecting their production; and 

of the supplier in question. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

The term “variation” includes variation in the frequency, 
timing or volume of the supply or delivery of the grocery 
goods. 
All such variations, etc. should be recorded in writing in 
the contract in accordance with Regulation 4. 

Regulation 10: Payment terms and conditions. 
This Regulation provides that the retailer or wholesaler 
shall pay the supplier within 30 days of the receipt of the 
supplier’s invoice or within 30 days of the date of 
delivery of the goods (whichever is the later) unless the 
parties make express provision for a different timeframe 
for payments in their grocery goods contract. 

Regulation 11: Promotions. 
This Regulation prohibits a retailer or wholesaler from 
compelling (either directly or indirectly) a supplier to 
make any payment in respect of the promotion of the 
supplier’s grocery goods in the retailer’s or wholesaler’s 
premises. This prohibition does not apply where the 
agreed contract between the two parties makes express 
provision for such payments. The Regulations further 
provide that prior to a promotion the retailer or 
wholesaler must give written notice (provided for in the 
contract) to the supplier specifying certain features of the 
promotions as follows. Specifications follow (omissis) 

Regulation 12: Payment for marketing costs 
This Regulation provides that a retailer or wholesaler 
shall not seek payment from a supplier for marketing 
costs. This prohibition does not apply where the agreed 
contract between the two parties: 
- makes express provision for such payments; 
- the payment is based on an objective and reasonable 

229 

 
 
 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

estimates of the marketing costs; and 
- any payment sought is in accordance with the agreed 
contract. 
If any such payment is requested by the retailer or 
wholesaler, then the retailer or wholesaler is obliged, if 
requested by the supplier, to provide the supplier with an 
estimate of marketing costs and the basis for that 
estimate.  Specifications follow (omissis) 

Regulation 13: Payment for retention, increased 
allocation or better positioning of shelf space. 
This Regulation prohibits a retailer or wholesaler from 
compelling (either directly or indirectly) a supplier to 
make any payment for the retention, increased allocation 
or better positioning of shelf space for the supplier’s 
grocery goods. This prohibition does not apply where the 
agreed contract between the two parties: 
- makes express provision for such payments; and 
- any payment sought is in accordance with the agreed 
contract. 
Specifications follow (omissis) 

Regulation 15: Payment for wastage. 
This Regulation provides that a retailer or wholesaler 
shall not seek payment from a supplier for wastage. This 
prohibition does not apply where: 
- the agreed contract between the two parties makes 
express provision for such payments; 
- the agreed contract makes express provision for an 
agreed average wastage cost; 
- the grocery goods contract makes express provision for 
the circumstances, where wastage arises from the 
negligence or fault of the supplier, in which the supplier 
will be required to make a payment to cover wastage at 

230 

 
 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

the retailer’s or wholesaler’s premises; 
- any payment sought is in accordance with the agreed 
contract; 
- the payment is based on an objective and reasonable 
estimates of the costs of the wastage to the retailer or 
wholesaler. 
These conditions are not cumulative. 
If any such payment is requested by the retailer or 
wholesaler, then the retailer or wholesaler is obliged, if 
requested by the supplier, to provide the supplier with an 
estimate of the cost of the wastage and the basis for that 
estimate. 
Specifications follow (omissis) 

Regulation 16: Payment for shrinkage 
This Regulation provides that a retailer shall not seek 
payment from a supplier for shrinkage. This prohibition 
does not apply where: 
- the agreed contract between the two parties makes 
express provision for such payments; 
- any payment sought is in accordance with the agreed 
contract; and 
- the payment is based on an objective and reasonable 
estimate of the costs of the shrinkage to the retailer. 
If any such payment is requested by the retailer, then the 
retailer is obliged, if requested by the supplier, to provide 
the supplier with an estimate of the cost of the shrinkage 
and the basis for that estimate. Specifications follow 
(omissis) 

Italy 

X 

X 

Use of open terms within 
list of detailed prohibited 
conducts. Reference to 
general principles, 

231 

 
 
 
 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

including those developed 
by the High Level Forum 

Section 6. Prohibited Activities in Retail Trade of Food 
Products 
(1) It is prohibited to bring forward the following 
requirements to a supplier in retail trade of food 
products: 
(…) 2) to pay directly or indirectly for the goods being 
present at a retail selling point, including for placing of 
goods in store shelves, except the case when the retailer 
and the supplier have entered into a written agreement 
that it will be paid for additional arrangement of the 
goods in special places; 
(…) 5) to purchase goods, services or property from the 
third person indicated by the retailer, except the case 
when it has an objective justification and entered into a 
separate written agreement regarding purchase of such 
goods or services; 
(…) 7) to change the specifications of goods, including 
assortment if the supplier has not been notified thereof 
within the time period specified in the contract, which 
may be not less than 10 days; 
(…) 
9) to pay directly or indirectly to a retailer for sales 
promotion measures or to otherwise reimburse all costs 
of such measures or part of them, except the case when 
the retailer has entered into a written agreement with the 
supplier regarding sales promotion measures; 
(…) 
(2) A campaign discount shall not be applied to goods 
not sold during sales promotion of goods, except the case 
when the retailer has entered into a written agreement 
with the supplier regarding application of campaign 
discount to goods not sold during sales promotion of 

Latvia 

X 

X 

Both open terms and 
detailed prohibitions 

232 

 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

goods. 

Article 3. Prohibition of unfair practices 
1. Retailers shall be prohibited from carrying out any 
actions contrary to fair business practices whereby the 
operational risk of the retailers is transferred to suppliers 
or they are imposed additional obligations or which limit 
the possibilities of suppliers to freely operate in the 
market and which are expressed as requirements for the 
supplier: 
(…)7) to accept unsold food products, except for non-
perishable packaged food products if they are safe, high-
quality and at least 1/3 of time before their expiration 
date remains or they have no expiration date and there is 
a prior agreement in relation to their return; 
8) to pay directly or indirectly a part of the costs of sales 
promotion carried out by the retailer or together with it 
or to compensate for such costs in any other way, except 
for the cases where there is a written agreement between 
the retailer and the supplier regarding the amount of 
costs to be paid and sales promotion activities to be 
applied; 
(…) 
10) to pay directly or indirectly or to compensate for the 
arrangement of goods, except for the cases where there is 
a written agreement between the retailer and the supplier 
regarding payment for the arrangement of goods. 

Lithuania 

X 

X 

Both open terms and 
detailed prohibitions 

Luxembourg 
Malta 
(The) 
Netherlands 
Poland 

No specific UTP legislation 
No specific UTP legislation 

No specific UTP legislation 

X 

Mainly general clauses and 

233 

 
 
 
 
 
 
 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

X 

X 

X 

open terms. Few examples 
and cases of UTPs are also 
listed. 
Mainly list of prohibited 
practices, though open 
terms are used in defining 
these. 
Mainly list of prohibited 
practices, though open 
terms are used in defining 
these. 
Legislative text not 
available (source of 
information: response to 
Green Paper consultation 
from S.R. Ministry of 
Agriculture). 
Cross sector legislation: 
main use of general clauses 
and open terms. Long list 
of prohibited practices in 
the food legislation (not 
available). 
General clause (part. 
exploitation of significant 
market power) and list of 
more detailed (per se?) 
prohibited practices. 
Legislative text not 
available. 
General clauses, open 
terms are largely used. 
Detailed practices are listed 
though described through 

234 

X 

X 

X 

X 

X 

Article 12. Unilateral changes and unforeseen 
commercial payments. 
1. Modification of established contractual terms, unless 
by mutual agreement of the parties, is prohibited. Food 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

open terms too. 
Same approach while 
referring to private 
regulation. 

Contractual exemption of TPs otherwise held unfair 

procurement contracts must contain appropriate clauses 
laying down the procedure for possible modification and, 
where appropriate, for the determination of retroactive 
application. 
2. Additional payments over the agreed price are 
prohibited, unless they are to cover 
the reasonable risk of referencing a new product or the 
partial financing of the marketing 
of a product reflected in the unitary retail price and have 
been agreed and explicitly included 
in the contract concluded in writing, together with a 
description of what said payments are for. 

Sweden 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

United 
Kingdom 

X 

X 

Both open terms and 
detailed description of 
prohibited conducts are 
used. 

235 

Contractual regulation of trade practices are allowed so 
to avoid unfairness (eg on contract changes, imposition 
of costs, etc. – see the text). E.g.: 

3. Variation of Supply Agreements and terms of supply 
(1) Subject to paragraph 3(2), a Retailer must not vary 
any Supply Agreement retrospectively, and must not 
request or require that a Supplier consent to retrospective 
variations of any Supply Agreement. 
(2) A Retailer may make an adjustment to terms of 
supply which has retroactive effect where the relevant 
Supply Agreement sets out clearly and unambiguously: 
(a) any specific change of circumstances (such 
circumstances being outside the Retailer’s control) that 
will allow for such adjustments to be made; and  
(b) detailed rules that will be used as the basis for 
calculating the adjustment to the terms of supply. 
(3) If a Retailer has the right to vary a Supply Agreement 
unilaterally, it must give Reasonable Notice of any such 
variation to the Supplier. 

 
 
 
 
 
 
 
Countries 

General 
clause 
only 

General clause + examples of 
prohibited practices 

List of “per se” 
prohibited practices 
(unfair as such; no need 
for further inquiry 
under a more general 
definition of UTP) 

Open terms v. strict 
standards 

Contractual exemption of TPs otherwise held unfair 

8. Payments for Wastage 
A Retailer must not directly or indirectly Require a 
Supplier to make any Payment to cover any Wastage of 
that Supplier’s Groceries incurred at that Retailer’s 
stores unless: 
(a) such Wastage is due to the negligence or default of 
that Supplier, and the relevant Supply Agreement sets 
out expressly and unambiguously what will constitute 
negligence or default on the part of the Supplier; or 
(b) the basis of such Payment is set out in the Supply 
Agreement. 

236 

 
 
 
 
 
 
 
2.3. Modes of regulation and prohibited unfair practices:  
commonly used general clauses and specific UTPs (6 UTPs list) in examined UTP legislation 

Which general clauses are more commonly used? 
Are there specific types of UTPs which are recurrently prohibited in UTP legislation? 

Abuse of 
economic 
dependence 
(as prohibited 
practice, 
notwithstanding 
the nature of 
ED as possible 
limitation for 
law’s scope of 
appl.) 

Abuse of 
superior 
bargaining 
power 
(as prohibited 
practice, 
notwithstanding 
the nature of 
BP as possible 
limitation for 
law’s scope of 
appl.) 

Prohibition of 
significance 
unbalance in 
rights and 
obligations 
/excessive 
benefits 

Payment 
periods 
longer 
than 30 
days 

Unilateral and 
retroactive 
changes to 
contracts 
(concerning 
volumes, 
quality 
standards, 
prices) 

Contributions to 
promotional or 
marketing costs 

Claims for 
wasted or 
unsold 
products 

Last-minute 
order 
cancellations 
concerning 
perishable 
products, or 
unfair contract 
termination in 
general 

Requests 
for upfront 
payments to 
secure or 
retain 
contracts 

Greece: DG Agri survey, update: 2015 
Malta: no answer available within DG Agri survey 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 
X 

X 

X 

X 

X 

X 

X 
(requiring 
remuneration for 
not provided 
service) 

X 
(unduly 
shifting the 
risk on the 
supplier) 
X 

X 

X 
(requiring 
remuneration for 
not provided 

X 

X 
X 
X 

X 

X 

X 

X 

X 

X 

237 

Countries 

Austria 
Belgium 

Bulgaria 

Croatia 
Cyprus 

Czech Republic 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Abuse of 
economic 
dependence 
(as prohibited 
practice, 
notwithstanding 
the nature of 
ED as possible 
limitation for 
law’s scope of 
appl.) 

Abuse of 
superior 
bargaining 
power 
(as prohibited 
practice, 
notwithstanding 
the nature of 
BP as possible 
limitation for 
law’s scope of 
appl.) 

Prohibition of 
significance 
unbalance in 
rights and 
obligations 
/excessive 
benefits 

Payment 
periods 
longer 
than 30 
days 

Unilateral and 
retroactive 
changes to 
contracts 
(concerning 
volumes, 
quality 
standards, 
prices) 

Last-minute 
order 
cancellations 
concerning 
perishable 
products, or 
unfair contract 
termination in 
general 

Requests 
for upfront 
payments to 
secure or 
retain 
contracts 

Contributions to 
promotional or 
marketing costs 

Claims for 
wasted or 
unsold 
products 

service) 

X 
X 
X 

X 

X 

X 

X 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 
No specific UTP legislation 
Only limited scope UTP legislation (mainly based on BtoC type UTPs 
X 

X 

X 

X 
X 
X 

X 
X 

X 
X 
X 
(incorporates 
High Level 
Forum Pr. and 
definition of 
pratices) 
X 
X 

X 
X 

X 
X 

X 

X 

X 
X 
X 

X 
X  
(food 
specific 
late 
payment 
legislation) 

No specific UTP legislation 
No specific UTP legislation 
No specific UTP legislation 

X  
(unfair 

X 

238 

X 

X 

X 
X 
(incorporates 
High Level 
Forum Pr. and 
definition of 
pratices) 

X 

X 
X 
X 

X 
X 

X 

X 

Countries 

Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 
Malta 
(The) 
Netherlands 
Poland 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Abuse of 
economic 
dependence 
(as prohibited 
practice, 
notwithstanding 
the nature of 
ED as possible 
limitation for 
law’s scope of 
appl.) 

Abuse of 
superior 
bargaining 
power 
(as prohibited 
practice, 
notwithstanding 
the nature of 
BP as possible 
limitation for 
law’s scope of 
appl.) 

Prohibition of 
significance 
unbalance in 
rights and 
obligations 
/excessive 
benefits 

contractual 
advantage) 

As part of 
competition 
law (impact on 
market 
required) 

N/A 

N/A 
X 

N/A 

Countries 

Portugal 

Romania 
Slovakia 

Slovenia 

Spain 
Sweden 
United Kingdom 

Payment 
periods 
longer 
than 30 
days 

Unilateral and 
retroactive 
changes to 
contracts 
(concerning 
volumes, 
quality 
standards, 
prices) 

Contributions to 
promotional or 
marketing costs 

Claims for 
wasted or 
unsold 
products 

Last-minute 
order 
cancellations 
concerning 
perishable 
products, or 
unfair contract 
termination in 
general 

Requests 
for upfront 
payments to 
secure or 
retain 
contracts 

X  
(food 
specific 
late 
payment 
legislation) 
X 
X 
X 
(45 days) 
X 

X 

X 

X 

X 

X 
N/A 
X 

N/A 
X 

X 
Only limited scope UTP legislation (mainly based on BtoC type UTPs 
X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 
X 

X 

239 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3. Enforcement 

A part from judicial enforcement and any forms of ADR, do MSs identify administrative authorities for the enforcement of 
legislation on UTP in business-to-business relation? 
Can these authorities act ex officio? 
Can they receive confidential complaints? 
Does legislation on UTPs enable enforcers (courts or administrative authorities) to impose injunctions to infringers? 
Does legislation on UTPs enable enforcers (courts or administrative authorities) to impose fines to infringers? 

Countries 

Main administrative 
enforcement authority 
(addressing UTP under 
lenses different from 
competition law ones) 

Additional administrative 
enforcement authorities 
(different 
competence/powers from the 
one on the left side) 

Confidential 
complaints 

Ex officio 
investigative powers 

Injunctive powers 

Pecuniary 
sanctions 

Greece: DG Agri survey, update: 2015 
Malta: no answer available within DG Agri survey 

Austria 

FEDERAL COMPETITION 
AUTHORITY 
(may seek injunctions 
from the Court) 
Local Supply Act and 
Unfair Competition Act 

Replaced by 
standing of 
administrative 
authority and 
business 
organizations. 
Deemed not 
necessary by the 
reporter since many 
administrative 
bodies and 
associations 
representing 
interests affected by 
infringements of 
Local Supply Act 
may file complaints 

Partially 
Specified in unfair 
competition law, not 
in Local Supply Act 

240 

X 
Court 
(upon request of CA 
too) 
Local Supply Act 
(Cartel Court) and 
Unfair Competition Act 

 
 
 
 
 
 
 
 
 
 
 
Countries 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech Republic 

Denmark 
Estonia 
Finland 

Main administrative 
enforcement authority 
(addressing UTP under 
lenses different from 
competition law ones) 

Additional administrative 
enforcement authorities 
(different 
competence/powers from the 
one on the left side) 

Confidential 
complaints 

Ex officio 
investigative powers 

Injunctive powers 

Pecuniary 
sanctions 

Only limited scope UTP legislation (mainly based on BtoC type UTPs) 

COMMISSION OF 
PROTECTION OF 
COMPETITION (CPC) 

COMPETITION 
AUTHORITY 

COMMISSION FOR THE 
PROTECTION OF 
COMPETITION 
OFFICE FOR THE 
PROTECTION OF 
COMPETITION 

Not as enforcers: 
Consultative Council (food); 
Reconciliation Commission 
(food) 

- 

- 

X 

N/A 

N/A 

X 

X 

X 

X 

X 

X 

Assessment of 
voluntary commitments 
by infringers 

X 
(courts only) 

X 
(and commitments) 

Only limited scope UTP legislation (mainly based on BtoC type UTPs) 
No specific UTP legislation 
Only limited scope UTP legislation (mainly based on BtoC type UTPs) 

X 

X 

X 

X 

X 

France 

DGCCRF (MIN. ECON.) 

CEPC (non binding 
opinions) 

X 

X 

Germany 

COMPETITION 
AUTHORITY 

_ 

X 

X 

241 

X 
(imposed by court, 
upon request of injured 
parties, Public 
Prosecutor, Minister 
Econ.) 
(infringements of art. L 
442-6) 

X 
(imposed by court also 
on the basis of CA’s 
request) 

Administrative 
fines (imposed by 
the Competition 
Authority for 
infringements of 
art. L441-7,8) 

Ammende civile 
(imposed by court 
for infringements 
of art. L 442-6) 
X 
(imposed by 
Competition 
Authority) 

 
 
 
 
 
Countries 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Main administrative 
enforcement authority 
(addressing UTP under 
lenses different from 
competition law ones) 
N/A 

Additional administrative 
enforcement authorities 
(different 
competence/powers from the 
one on the left side) 
N/A 

NATIONAL FOOD CHAIN 
SAFETY OFFICE 

COMPETITION AND 
CONSUMER PROTECTION 
COMMISSION 
COMPETITION 
AUTHORITY 
COMPETITION COUNCIL 

- 

- 

- 

Lithuania 

COMPETITION COUNCIL 

Luxembourg 
Malta 
(The) Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

OFFICE OF COMPETITION 
AND CONSUMER 
PROTECTION 

ASAE (AUTORIDADE 
ADMINISTRATIVA 
NACIONAL 
ESPECIALIZADA) 
MINISTRY OF FINANCE 
(depending on UTP – 
more on competition 
law side) 
MINISTRY OF 
AGRICULTURE AND 
RURAL DEVELOPMENT 
SLOVENIAN 
COMPETITION 
PROTECTION AGENCY 

National Center for 
Agricultural support 
(only monitoring over 
written form of agrifood 
contracts) 

or CONSUMER PROTECTION 
AUTHORITY 
(depending on UTP – more 
on unfair trade side) 

Ombudsman 
(general monitoring and 
reporting to CPA – 

242 

Confidential 
complaints 

Ex officio 
investigative powers 

Injunctive powers 

Pecuniary 
sanctions 

N/A 

N/A 

X 

X 

X 

X 
X 
(art. 5.2) 

X 

X 

X 

X 

X 

No specific UTP legislation 
No specific UTP legislation 
No specific UTP legislation 

X 
(compet. auth.) 

X 
(compet. auth.) 

N/A 
Prohibition to use 
unfair terms. 
Warnings first (only for 
Smes) 

N/A 

X 

X 
(criminal. Imposed 
only by courts) 

X 

X 
(+astreinte) 

X 

X 

X 

(commitments) 
Astreintes for failure to 
comply with comp. 
auth.’s enforcing 
decisions 

X 
(to the entity and to 
managers) 

No 

No 

No 

X 

X 

N/A 

X 

X 

X 

X 
(criminal sanctions 
imposed by adm 
auth) 

X 

X 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

Spain 

Main administrative 
enforcement authority 
(addressing UTP under 
lenses different from 
competition law ones) 

Depending on territorial 
dimension of UTPs: 
ADMINISTRATION OF 
AUT. COMM. OR 
GENERAL STATE 
ADMINISTRATION (D.G. 
of Food Industry, 
Ministry of 
Agriculture/Council of 
Ministries, depending 
on the gravity of 
infringement) 

Additional administrative 
enforcement authorities 
(different 
competence/powers from the 
one on the left side) 
signalling of UTPs – and to 
Government – annual report) 

SPANISH AGENCY FOR FOOD 
INFORMATION AND CONTROL 
(within the Ministry of 
Agriculture): 
monitor over compliance, 
not strictly an enforcement 
authority; manages control 
system; receives and reports 
complaints to enforcing 
authorities. 

Confidential 
complaints 

Ex officio 
investigative powers 

Injunctive powers 

Pecuniary 
sanctions 

X 

X 

X 

Sweden 

Only limited scope UTP legislation (mainly based on BtoC type UTPs) 

United Kingdom 

GROCERY CODE 
ADJUDICATOR 

(forthcoming) Small 
Business Commissioner (for 
Smes only; will receive 
complaints and provide 
advice and information) 

X 

X467 

Recommendations 

X 

guidance 

467  See  Statutory 
(https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/511676/GCA_Statutory_Guidance_updated_March_2016.pdf) 
“The  Adjudicator  may  carry  out  an  investigation  if  the  Adjudicator  has  reasonable  grounds  to  suspect  that  a  large  retailer  has  broken  the  Code  or  has  failed  to  follow  a 
recommendation made following a previous investigation by the Adjudicator on action it should take to comply with the Code. The reasonable grounds for suspicion might be based 
on evidence supplied by direct or indirect suppliers, third parties such as trade associations, other retailers, whistle-blowers or information which is in the public domain.” 

the  Groceries  Code  Adjudicator  will 

investigation 

enforcement 

functions, 

2016, 

carry 

how 

and 

out 

on 

p. 

5 

243 

 
 
 
 
 
 
 
 
                                                 
3.1. Publication of UTP enforcement decisions by courts and administrative authorities 

Are decisions by courts and administrative authorities enforcing UTP legislation made public? 

MS 

PUBLICATION OF COURT’S DECISIONS 
ON UTP ENFORCEMENT 

PUBLICATION OF ADMINISTRATIVE 
AUTHORITY’S DECISIONS ON UTP 
ENFORCEMENT 

HIGHLIGHT IN ADMINISTRATIVE 
AUTHORITY ANNUAL REPORT OR 
WEBPAGE 

X 

Summary information (examples, not necessary exhaustive) 

X 

X 

X 

N/A 

N/A 

X 

N/A 

N/A 

N/A 

N/A 

X 
(de facto – no legislative reference 
available) 

X 
(de facto – no legislative reference 
available) 

N/A 

N/A 

N/A 

X 

X 

N/A 

N/A 

N/A 

X 

X 
(for injunctions) 
N/A 

X 

N/A 

N/A 

N/A 

N/A 

N/A 

244 

AUSTRIA 

BULGARIA 

CROATIA 

CYPRUS 

CZECH R. 

FRANCE 

GERMANY 

GREECE 

HUNGARY 

IRELAND 

ITALY 

LATVIA 

LITHUANIA 

POLAND 

PORTUGAL 

ROMANIA 

SLOVAKIA 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SLOVENIA 

SPAIN 

UNITED KINGDOM 

N/A 

N/A 

X 

X 

N/A 

245 

 
 
 
 
 
 
 
 
 
 
Does legislation on UTP in business-to-business relations provide fines and their escalation within minimum and maximum 
thresholds? 
How are these thresholds defined? 

4. Fines 

Countries 

Pecuniary sanctions 

Minimum/maximum/no 
thresholds 

Min p.s. 

Max p.s. 

% turnover 

Practices/fines 

Greece: DG Agri survey, update: 2015 
Malta: no answer available within DG Agri survey 

X 
(District Administrative 
Authority) 
(Local Supply Act) 

Only maximum 
threshold 

any party who in 
the course of 
business for 
competitive 
purposes knowingly 
applies aggressive 
or misleading 
business practices 
in a public 
announcement or in 
a media, shall be 
sentenced by the 
court to a fine of up 
to 180 per diem 
rates, according to 
the Act against 
Unfair Competition. 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

X 

X 

Minimum/maximum 
thresholds 

Only maximum 
threshold 

246 

5000 eur 

25.000 eur 
(in case turnover is 
0) 
Most serious 
infringements: 

Up to 10% 
(t.o. of the product 
concerned) 

This fine for abuse 
of stronger 
bargaining position. 
(website 
presentation) When 

Austria 

Belgium 

Bulgaria 

Croatia 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

Pecuniary sanctions 

Minimum/maximum/no 
thresholds 

Min p.s. 

Max p.s. 

% turnover 

Practices/fines 

up to 662556,81 eur 
(legal persons) 
331278,41 eur 
(physical persons) 
Lower caps for 
serious and minor 
infringements 

imposing the fines 
the CCA takes into 
account all 
mitigating and 
aggravating 
circumstances, such 
as the gravity, 
scope and duration 
of the infringement 
and the 
consequences this 
infringement had 
on the suppliers. 
The CCA uses fines 
to eliminate, restore 
and promote fair 
trading practices 
that protect the 
participants in the 
food supply chain. 
Fines serve as 
punishment for 
infringers but at the 
same time they 
ensure a credible 
deterrence against 
the use of UTPs. 
Depending on the 
gravity and the 
significance of the 
infringement the 
UTPs Act 
recognises fines for 
most serious 
infringements, 
serious 
infringements, for 
minor and other 

247 

 
 
 
Countries 

Pecuniary sanctions 

Minimum/maximum/no 
thresholds 

Min p.s. 

Max p.s. 

% turnover 

Practices/fines 

Cyprus 

Czech Republic 

Denmark 
Estonia 
Finland 

France 

X 

X 

X 
Administrative fines 
(infringements of art. 
L441-7,8) 
Ammende civile 
(infringements of art. L 
442-6) 

Germany 

X 

Only maximum 
threshold 
Only maximum 
thresholds 
Only limited scope UTP legislation (mainly based on BtoC type UTPs 
No specific UTP legislation 
Only limited scope UTP legislation (mainly based on BtoC type UTPs 

39.141.000 eur 

Up to 10% 

Up to 10% 

Only maximum 
thresholds 

Only maximum 
thresholds 

Admin fines 
75.000 eur (ind.) 
375.000 (entity) 

Civil sanctions 
(ammende civile): 
5 millions eur 

1mln eur 

Up to 10% 

Greece 

N/A 

Only maximum 
thresholds 

N/A 

50.000 eur 

N/A 

infringements. 

X 
Administrative 
fines 
(infringements of 
art. L441-7,8) 
Ammende civile 
(infringements of 
art. L 442-6) 

Act No. 146/1914, 
Art. 18a provides 
that in case of 
abuse of economic 
dependence, 
damages can be 
claimed and a fine 
up to 50.000 Euros 
may also be 
imposed. The fine 
can be doubled in 
case of recurrence. 
(par. 2 & 3 of Art. 
18a). 

Hungary 

Ireland 

Italy 

X 

X 
(criminal, imposed only 
by courts) 
X 

Minimum/maximum 
thresholds 

Minimum/maximum 
thresholds 

318 eur 

1.591.000 eur 

Up to 10% 

3000 eur 

100.000 eur 

Minimum/maximum 

2000 eur 

50.000 eur 

Different fines 

248 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

Pecuniary sanctions 

Minimum/maximum/no 
thresholds 
thresholds 

Min p.s. 

Max p.s. 

% turnover 

Practices/fines 

(500 for payment 
delay) 

(500.000 for 
payment delay) 

depending on UTP 
(contracts v. 
practices v. 
payment 
delay/practices) 

Latvia 

Lithuania 

Luxembourg 
Malta 
(The) Netherlands 

Poland 

X 

X 

Minimum/maximum 
thresholds 
Only maximum 
threshold 

70 eur 

Up to 0,2% of net 
t.o. 

120.000 eur 

X 
(to the entity and to 
managers) 

No specific UTP legislation 
No specific UTP legislation 
No specific UTP legislation 

Up to 3% 

Portugal 

X 

Minimum/maximum 
thresholds 

- € 250 for natural 
person 
- € 500 for micro 
enterprises 
-€ 750 for small 
enterprises 
-€ 1000 for 
medium 
enterprises 
- € 2.500 for large 
enterprises 

Minimum/maximum 
thresholds 

10.756,15 eur 

- € 20.000 for 
natural person 
- € 50.000 for micro 
enterprises 
-€ 150.000 for 
small enterprises 
-€ 450.000 for 
medium enterprises 
- € 2,5 mln for large 
enterprises 

21.512,31 eur 
(32.330 eur for 
competition law 
type infringements) 

Romania 

Slovakia 

Slovenia 

Spain 

X 
(criminal sanctions 
imposed by adm auth – 
Consumer Protection 
Authority) 

X 

X 

X 

Minimum/maximum 
thresholds 
Minimum/maximum 
thresholds 

1000 eur 

300.000 eur 

6.000 eur 

18.000 eur 

Minimum/maximum 
threshold 

3000 eur 
(minor offenses) 

1.000.000 eur (very 
serious offenses) 
100.000 eur 

249 

Distinction between 
minor and serious 
offenses is based on 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Countries 

Pecuniary sanctions 

Minimum/maximum/no 
thresholds 

Min p.s. 

Max p.s. 

% turnover 

Practices/fines 

(serious offenses) 

type of UTPs. 
Article 25. Scale of 
penalties. Penalties 
shall be scaled 
mainly on the basis 
of the degree of 
intentionality or the 
nature of the 
damage caused. 

Sweden 

United Kingdom 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

X 

Only maximum 
threshold 

1% of t.o. in UK 

250 

 
 
 
 
 
 
 
 
 
5. Enforcement practices 

Countrie
s 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

Austria 

6 

6 

6 

Fines 

6 

Greece: DG Agri survey, update: 2015 
Malta: no answer available within DG Agri survey 

- Pago International GmbH 
-Pfeiffer HandelsgmbH und die Zielpunkt 
GmbH 
- Spar Österreich-Gruppe 
- Vöslauer Mineralwasser AG 
- Spar Österreich-Gruppe II 
- RAUCH Fruchtsäfte GmbH & Co OG 

- in cartel or abuse 
of dominant position 
- delusive 
information of a 
merger registration 
or wrong answer at 
the information 
requested 

- Max 10 % of 
total turnover 
for abuse of 
dominant 
position 
-max 1% of 
total turnover 

N/A 

N/A 

Belgium 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

251 

 
 
 
 
 
 
 
 
UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

0 

N/A 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

- Min: BGN 
35.000 
Max: BGN 
157.981 (7% of 
the generated 
turnoverof the 
specific goods 
at issue) 

Countrie
s 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Bulgaria 

8 

8 

8 

- 5 pending 
investigations 
- 2 infringement 
decisions 

Croatia 

Cyprus 

N/A 

N/A 

N/A 

0 

0 

0 

N/A 

N/A 

2 

N/A 

0 

- Siemens Bulgaria 
- Kaufland Bulgaria 

-  Abuse of 
dominant position 
- Abuse of economic 
dependence 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

0 

N/A 

N/A 

Czech 
Rupublic 

22 

18 

31 

- 2 closed 
proceedings because 
the infringement of 
the law was not 
proven 
-  2 closed 
proceedings because 
the Office agreed to 
accept the supposed 
commitments that 
are able to remove 
detrimental/harmful 
effect/state in the 
relevant market 

0 

N/A 

N/A 

N/A 

0 

N/A 

Denmar
k 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

252 

 
 
 
Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

No specific UTP legislation 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

Countrie
s 

Estonia 

Finland 

France 

595 (2015), 
494 (2016) 

2015: 36 
national, 25 
regional; 
2016: 32 
national, 20 
regional; 
2016 

8 civil proceedings 
started in 2015, 6 
started in 2016; 

158 criminal 
sanctions in 
2015; 134 in 
2016; 

N/A see 
https://www.economie.gouv.fr/cepc/etudes
-jurisprudence (names unpublished) 

main practices 
sanctioned: 
significant 
unbalance  and 
procédures  

Civil sanctions: 
2 580 000 
(2015); € 150 
000 € (2016) 
Profit 
restitution: 3 78 
259 791 € 
(2015); 76 871 
390 €  (2016) 
Criminal 
sanctions: 239 
900 € (2015); 
470 731 €  
(2016) 
Settlments: 955 
450 € (2015); 
411 363 €  
(2016) 

Not in the 
food sector 
(but 
complaints 
about 
international 
purchase 
centers 

N/A 

253 

 
 
 
 
German
y 

Greece 

Countrie
s 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

10 

Few cases 

1 

Annulled by the 
Higher Regional 
Court of Düsseldorf 

Pending 

Edeka 

-abusive takevover 
justification 
-inducing suppliers 
to grant benefits 
without an objective 
justification 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

N/A 

0 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

Hungary 

41 

41 

152 

-29 fined 
undertakings 
- 11 investigations 
ended with the 
commitment of the 
traders 
- 67 ended without 
finding any 
infringement 

20 

- Payment delay 
(more than 30 days) 
- Sale at less than 
purchaser price 
- Price discimination 
- Not transferring 
the discount given 
by the supplier 
according to the 
discount period 
- Fee for not real 
service 
- Fee for not 
proportional 
services 
- Listing fee linked 
not real turnover 
- Provisions of 
services not serving 
the counterparties' 
benefits 
- Not publishing 

- AUCHAN Magyarország Kft. 
- ALDI Magyarország Bt. 
- SPAR Magyarország Kft. 
- Lidi Magyarország Kereskedelmi Bt. 
- dm-Drogerie Markt Kft. 
- Palóc Nagykereskedelmi Kft.  
- Hunnia Frucht Kft. 
- Nagy István e. v. 
- Elektro_Asz Kft. 
- Agócsker 2002 Kft. 
- OBI Hungary Retail Kft. 
- Mecsek Faszért Zrt. 
- City Food Euro Kft. 
- Budapest Bortársaság 
- Metro Kereskedelmi Kft. 
- TESCO Global Zrt. 
- CBA DL Projekt Kft. 

254 

- Min: HUF 
100.00 
- Max: HUF 80 
millions 

0 

N/A 

 
 
 
Countrie
s 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

business policy 

Ireland 

0 

0 

0 

Italy 

N/A 

N/A 

N/A 

Latvia 

2 

2 

N/A 

N/A 

Lithuani
a 

Luxemb

2 

1 

N/A 

N/A 

N/A 

N/A 

Pending 

Pending 

Injunction and fine 

1 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

0 

N/A 

N/A 

N/A 

N/A 

N/A 

No specific UTP legislation 

255 

 
 
 
Countrie
s 

ourg 

Malta 

(The) 
Netherla
nds 

Poland 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

No specific UTP legislation 

No specific UTP legislation 

0 

0 

0 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

256 

 
 
 
Countrie
s 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

Portugal 

80 (2015), 
46 (2016) 

26 (2015) , 
20 (2016) 

2 (2015) , 2 
(2016) 

42 impositions of 
sanctions 
- 33 without any 
sanctions 

-17 entities have 
been fined 

Caisdis – Sociedade de Distribuição 
S.A. Aldi Portugal -Supermercados,  
Lda.Algueiradis - Sociedade de 
Distribuição, 
 S.A.António Manuel dos Santos 
AlmeidaArmazém MulticashAuchan 
Portugal Hipermercados,  
S.A.BCM-Bricolage, 
 S.A.Central Deborla - Comércio de 
Utilidades,  
S.A.Continente Hipermercados, 
 S.A.CÓPRAVE - Sociedade Avícola,  
Lda.Dia Portugal - Supermercados, 
Sociedade Unipessoal, 
 Lda.Dietimport, 
 S.A.Eternas Novidades, Unipessoal,  
Lda.Ideias de Pé - Sapatarias, 
 Lda.Ikea Portugal - Móveis e Decoração,  
Lda.José Júlio Leite Mesquita & Cª,  
Lda.Lidl & CompanhiaMakro - Cash & 
Carry PortugalMedia Markt  
- SetúbalMedia Markt Alfragide - 
Produtos Informáticos e Electrónicos,  
Lda.Media Markt Gaia - produtos 
Informáticos e Electrónicos,  
Lda.Média Markt Nascente - Produtos 
Informáticos e Eletrónicos, 
 Lda.Media Markt Sintra - Produtos 
Informática e Electrodomésticos, 
 Lda.Modelo Continente Hipermercados, 
 S.A.Moviflor - Comércio de Mobiliário, 
 S.A.Naddem ImtiazNova Figueiradis - 
Sociedade de Distribuição, 
 S.A.Pingo Doce - Distribuição Alimentar,  
257 
S.A.Rádio Popular - Electrodomésicos, 
 S.A.Zhu Xing - Importação & 
Exportação, 
 Lda.Worten - Equipamentos para o lar, 
 S.A.Rádio Popular - Electrodomésicos, 
 S.A.Worten - Equipamentos para o lar, 

13 cases of sales 
below cost 
4 cases of pricing 
tables references 

- Min: € 250 
- Max: € 
500.000 

 
 
 
 
 
Countrie
s 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

Romania 

Slovakia 

0 

9 

0 

9 

0 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

N/A 

39 

-12 confirmed the 
infringement of law  
- 18 did not 
confirmed the 
infringement of law 
- 9 are Pending 

4 

-Tesco Stores SR s.r.o 
-Retail Value Stores a.s 
-Terno Group K.s. 
-Kaufland Slovenka Republica v.o.s 

-non compliance 
with the payment 
terms  
- requests for 
additional monetary 
payments 

-Min € 1.000  
- Max € 
244.000 € 
-Average € 
58.261 

N/A 

N/A 

Slovenia 

N/A 

N/A 

0 

N/A 

N/A 

N/A 

N/A 

Spain 

98 

98 

1784 

- 43 sanctions 
proceedings were 
opened on the basis 
of confidential 
complaints  
- by December 2016 
347 sanctions 
proceedings on the 
basis of ex oficio 
investigations 

95 

N/A 

- 62 % for the 
infringiment of 
payment deadlines  
- 23% for not having 
formalised 
compulsory 
contracts 
- 7% for not 
providing the 
required information 
-4% for not 
including the 
mandatory clauses 
in the contracts 
- 4% for other 
causes: recidivism 
and unilateral 
modifications 

- Min € 250  
- Max € 10000 
-Average 8673€ 

N/A 

N/A 

Sweden 

Only limited scope UTP legislation (mainly based on BtoC type UTPs 

258 

 
 
 
 
 
 
Countrie
s 

Number 
of 
complai
nts 
(2015 -
2016) 

Number 
of 
actions 
after the 
complia
nce 
submissi
ons 

Investiga
tion 
conducte
d by 
enforce
ment 
bodies 

Results of 
investigation 

Number of 
fines or 
sanctions as 
consequence 
of UTPs 

Fined / sanctioned entities 
(names) 

Specific 
fined/sanctione
d practices 

Minimun, 
average and 
maximum 
level of fines 
(absolute 
terms or % 
of turnover) 

UTPs cases 
in cross-
border 
transaction
s 

Impac
t of 
the 
cross-
border 
UTPs 

UK 

0 

0 

1 

Pending 

Pending 

Tesco Plc (still under investigation) 

Delayed in 
payments 

N/A 

N/A 

N/A 

259 

 
 
 
 
 
Annex H: Economic impact of unfair trading practices 
regulations in the food supply chain (DG Competition) 

An Annex prepared for the Impact Assessment on the Initiative to improve the food supply chain 

Chief Economist – DG COMPETITION 

22 January 2018 

1. INTRODUCTION 

The  food  sector  in  many  Member  States  displays  some  imbalances  of  bargaining  power  between 
firms  at  different  levels  of  the  supply  chain.  Such  imbalances  could  be  the  source  of  potential 
problems  whereby  a  trading  partner  considers  that  it  has  been  treated  unfairly  by  its  counterpart 
with stronger bargaining power, be it either the supplier or the buyer. Competition policy can help to 
mitigate  (some  of)  these  problems  only  in  few  cases.  Indeed  competition  law  only  deals  with 
situations where a particular seller/buyer possesses a "dominant position" in that it has some power 
over buyers/suppliers in general, and not only over one or few particular firm(s), and where there are 
likely  anti-competitive  effects.  Therefore,  unequal  bargaining  power  and  resulting  imbalances  in 
trading relationships rarely imply an infringement of competition law.468 Such issues may be, where 
appropriate, addressed by other policy tools, such as contract and unfair commercial practices law.469 
General  contract  law  may  not  be  enforceable  in  a  number  of  situations.  In  such  situations,  a  well-
targeted  regulation  of  certain  trading  practices  aiming  at  ensuring  fairness  between  actors  in  the 
food supply chain could help to resolve specific issues. 

As explained in the Impact Assessment, a strong enabling factor of Unfair Trading Practices (UTPs) in 
the  food  supply  chain  is  that  it  is  characterized  by  large  differences  in  trading  partners'  bargaining 
power.  These  imbalances,  which  do  not  constitute  in  themselves  an  abuse  of  power,  may  lead  to 
situations  where  bargaining  power  is  exercised  through  unfair  mechanisms.  Farmers  and  SME 
operators, who generally possess a low level of bargaining power, are thus particularly prone to be 
affected by UTPs. 

It is not obvious to determine what is "fair" or unfair" in bilateral commercial negotiations. In fact, 
many practices mentioned in the debate about UTPs relate to the determination of the price of the 
transaction and determining a "fair price" in that regard is a daunting task. Regulating it is even more 
challenging  if  one  wants  to  maintain  the  room  for  operators  to  innovate  in  a  market-oriented 
economy.  

468 ECN Activities in the Food Sector, Report on competition law enforcement and market monitoring activities by 
European 
at 
the 
http://ec.europa.eu/competition/ecn/food_report_en.pdf. 
469 Idem, para 73. 

competition 

authorities 

available 

sector, 

food 

para 

26, 

in 

260 

 
 
 
 
                                                 
This Annex presents a brief summary of the economic impact of regulating UTPs in the food supply 
chain, and introduces an approach that in general distinguishes practices agreed between parties ex-
ante  (i.e.  before  the  commercial  agreement  is  concluded,  or  before  sales  are  realised)  and  those 
which  occur  ex-post  (after  the  commercial  agreement  has  been  concluded  or  sales  have 
materialised). Importantly, the distinction between ex-ante and ex-post is not linked to the existence 
of  a  formal,  written  contract.  The  criterion  to  distinguish  between  ex-ante  and  ex-post  is  rather 
whether  the  parties  to  the  commercial  transaction  have  reached  a  common  understanding  of  the 
transaction,  irrespective  of  its  form  (e.g.  a  written  contract,  an  exchange  of  emails,  an  oral 
agreement,  etc.),  and  have  started  the  transaction,  for  example,  by  making  deliveries  and  sending 
orders. 

This Annex was prepared by the Chief Economist of the Directorate-General for Competition. It builds 
on the report compiling the principal issues raised by academic specialists in Agricultural Economics 
speaking at the workshop on "Unfair trading practices in the food supply chain" held in Brussels in 
July  2017,  jointly  organised  by  the  Directorate-General  for  Agriculture  and  Rural  Development  and 
the Joint Research Centre.470 

The Annex also builds on the report of the Agricultural Markets Task Force (AMTF),471 and explains 
why  some  of  the  practices  considered  in  the  report  as  UTPs  are  instead  potentially  beneficial  for 
farmers because they increase the total gains to be shared between trading partners. Hence, banning 
such practices could have a negative impact on farmers' business. On the other hand, several of the 
other  practices  listed  by  the  AMTF  could  indeed  often  be  detrimental  to  farmers  and  other 
participants in the food supply chain with little bargaining power. The main objective of the Annex is 
to suggest a framework that helps distinguishing between the two sets of practices. 

This Annex also identifies potential unintended negative consequences of regulating practices in the 
food supply chain, which were not considered in the AMTF's report as it focussed on the position of 
farmers  in  the  chain,  notably  regulating  the  trading  relationships  between  large  (mostly  brand) 
manufacturers and their large customers (e.g. modern retailers). This includes reducing the pressure 
exerted  in  a  competitive  environment  on  the  margins  of  these  large  manufacturers  and  increasing 
prices for the final consumer.  

2. RISKS OF REGULATING UNFAIR TRADING PRACTICES 

As  mentioned  by  Swinnen  and  Vandervelde,  it  is  important  to  "clearly  define  UTPs  and  provide  an 
exhaustive  list  of  what  can  be  considered  as  such."472  The  main  risk  in  having  a  broad  or  vague 
definition  of  UTPs,  according  to  Richard  Sexton,  is  that  it  could  prevent  efficiency-enhancing 

470  See  the  JRC  Technical  Report,  2017,  Unfair  trading  practices  in  the  food  supply  chain,  available  at 
https://publications.europa.eu/en/publication-detail/-/publication/924dbb04-db00-11e7-a506-01aa75ed71a1/ 
471 Agricultural Markets Task Force, 2016, Improving Market Outcomes, Enhancing the position of Farmers in the 
Supply Chain. 
472  Johan  Swinnen  and  Senne  Vandevelde,  2017,  "Regulating  UTPs:  diversity  versus  harmonisation  of  Member 
State rules," in Unfair trading practices in the food supply chain, JRC Technical Report. 

261 

 
 
 
                                                 
behaviours  and  commercial  practices  from  taking  place.  Efficient  commercial  transactions  create 
value by increasing the total gains from the transaction to be shared by the various trading partners. 
This risk holds regardless of the size of the operators or their position within the supply chain. 

Indeed, as Sexton mentions,473 commercial transactions between various businesses along the supply 
chain typically aim both at (i) maximizing the total gains from the transaction (i.e. the size of the pie), 
and  (ii)  splitting  these  total  gains  between  parties  (i.e.  sharing  the  pie).  Therefore,  identifying 
efficiency-enhancing  commercial  practices  as  UTPs  and  prohibiting  them  could  very  well  harm  all 
parties  involved,  including  farmers,  by  reducing  the  size  of  the  pie  (the  total  gains  from  the 
transaction)  to  be  shared  between  the  trading  partners  in  the  first  place.  As  Sexton  puts  it: 
"Proscribing  behaviours  that  are  efficiency  enhancing  will  reduce  the  surplus  to  a  transaction  and 
likely harm both parties to it, making it imperative that regulatory bodies do not incorrectly identify 
such behaviours as UTPs." 

In  this  respect,  it  is  important  to  consider  what  would  happen  if  practices  that  can  render  a 
commercial transaction more efficient from the trading partners' point of view are prevented by UTP 
regulations. In such case, one should recall that UTPs are defined as practices that "grossly deviate 
from good commercial conduct and are contrary to good faith and fair dealing and which are typically 
imposed in a situation of imbalance by a stronger party on a weaker one."474 This means that the aim 
of regulation of UTPs should be to prevent trading partners with strong bargaining power to engage 
into  some  clearly  identified  "unfair"  practices,  but  not  to  prevent  these  trading  partners  from 
exercising  their  bargaining  power  in  a  "fair"  manner  when  negotiating,  e.g.  obtain  low  purchase 
prices. Then, if UTP regulations mistakenly ban practices that could render a commercial transaction 
more efficient from the trading partners' point of view, an imbalance of bargaining power would still 
exist  and  would  still  be  exercised  by  the  stronger  party,  albeit  in  a  situation  which  can  very  likely 
make the outcome worse for all players involved. 

Moreover, there can be unintended negative consequences of regulating practices in the food supply 
chain.  This  concerns  notably  regulating  the  trading  relationships  between  (mostly  brand) 
manufacturers holding a significant share of the market of the sales of food products in a particular 
product  category  in  a  given  Member  State  (hereafter  designated  in  a  simplified  way  as  "large 
manufacturers") and their "large customers" (e.g. modern retailers holding a significant share of the 
food retail sales in a given Member State). Regulating commercial transactions between such large 
players could reduce the pressure that large customers can exert on large manufacturers to reduce 
their margins and imply significant market disturbance because of their broad impact on the market 
and, ultimately, on consumer prices.475 Besides, it is not obvious that farmers or other parties higher 

473 Richard J. Sexton, 2017, "Unfair trade practices in the food supply chain: defining the problem and the policy 
issues," in Unfair trading practices in the food supply chain, JRC Technical Report. 
474  European  Commission,  2013,  Green  Paper  on  unfair  trading  practices  in  the  Business-to-Business  Food  and 
Non-food Supply Chain in Europe. 
475 Any regulation of contractual practices in a supply chain can impact final consumers, possibly through adverse 
impact on consumer prices. For instance, the French Loi Galland was enforced in 1997 and was meant to protect 
small firms from large competitors by defining the relevant cost threshold to implement below-cost regulations, but 
resulted in creating a situation which de facto allowed for industry-wide price floors; see, P. Biscourp et al., 2013, 

262 

 
 
                                                 
 
up in the supply chain would benefit from a regulation of UTPs that would give large processors  or 
manufacturers  greater  margins.  A  large  manufacturer  that  would  leverage  a  regulation  of  UTPs  to 
pressurize  the  retailers  to  increase  prices  at  which  retailers  buy  from  the  manufacturer  has  no 
obligation  or  incentives  and  is  unlikely  to  share  with  its  own  suppliers  the  extra  benefits  it  would 
obtain from such regulation. 

3. A UNIFIED APPROACH 

3.1 EX-ANTE AGREEMENTS SHOULD GENERALLY BE ALLOWED  

Sexton explains that even in the case where maximizing the total gains resulting from a transaction 
conflicts  with  each  party's  incentives  to  capture  a  larger  share  of  these  gains,  there  exist  ex-ante 
contractual  pricing  mechanisms  (e.g.  slotting  allowances  or  various  forms  of  upfront  payments, 
contribution  to  promotions)  which  can  "enable  the  trading  partner  with  a  bargaining-power 
advantage  to  extract  surplus  to  a  transaction  without  imposing  UTPs  that  diminish  the  surplus 
associated  with  the  transaction."476  These  mechanisms  thus  provide  such  trading  partner  with 
incentives not to engage in UTPs that would decrease the total gains to the transaction. In addition, 
Sexton points out that the long-run viability of trading partners (hence, ensuring them a fair share of 
the gains from a transaction) is also usually in the interest of firms with strong bargaining power. As 
regard suppliers of agricultural products Sexton notably points out that their buyers try to distinguish 
themselves  from  their  competitors  through  specific  product  characteristics:  as  a  result  switching 
suppliers  can  be  costly  and  it  is  in  the  interest  of  the  buyers  to  maintain  the  long-term  viability  of 
existing suppliers. In other words, contractual provisions or trading conditions to which the parties 
would agree ex-ante in general lead to efficiencies. 

Also, there exist some mechanisms to share the extra value generated by the transaction between 
parties.  Hence,  even  trading  partners  with  low  levels  of  bargaining  power  often  benefit  from  the 
practices which generate value for the industry (i.e. which increases the size of the pie). 

The party with weaker bargaining power may still like to obtain more from the transaction but that 
would only be possible through acquiring a different economic position (e.g. a much larger scale that 
reduces costs or producing a different unique product) or through an arbitrary external intervention 
to  set  the  prices  at  a  different  level  (such  as  price  regulation  as  is  done  in  non-market-oriented 
economies). 

Contractual provisions or trading conditions to which the parties would agree ex-ante typically lead 
to efficiencies and should not be banned under UTP regulations, because normally they would make 

"The  Effects  of  Retail  Regulations  on  Prices:  Evidence  from  the  Loi  Galland,"  The  Economic  Journal,  123,  pp. 
1279-1312. 
476 See footnote 473 above. 

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all  parties  involved  better  off.477  For  instance,  a  supplier's  contribution  to  promotions  can  help  to 
adapt supply to consumers' demand. By contrast, if suppliers' contributions to promotions were to 
be  banned  as  a  general  rule,  the  gains  from  adapting  supply  to  demand  could  be  lost,  resulting  in 
losses  for  all  parties  involved.  In  particular,  losses  could  be  large  for  the  suppliers  that  do  not 
participate in promotions because consumers could redirect their purchases towards other products, 
for instance because these products would be promoted instead. As an example, if suppliers of fresh 
fruits  and  vegetables  cannot  contribute  to  promotions,  retailers  would  have  to  bear  the  entire 
contribution to such promotions and could face more difficulties to adapt the overall supply of fresh 
fruits and vegetables to demand than if the contribution to promotions was shared between trading 
partners. They could also deflect the promotions to other categories of products, such as processed 
food products, thus leading to a negative impact on sales of fresh fruits and vegetables. 

Ultimately operators adapt to regulations to be able to secure sales and earnings. If suppliers cannot 
contribute to promotions, they will still be able to reduce their prices for any given period (as part of 
setting  their  so-called  "list  price"  outside  promotions)  and  try  therefore  to  out-compete  other 
suppliers by such reductions. Retailers will still be able to advertise "decreasing prices" versus "stable 
or  increasing  prices"  and  suppliers  will  continue  to  obtain  the  same  or  similar  benefit  from  their 
transactions.  Similarly,  if  a  supplier  is  prohibited  to  make  upfront  payments  and  maintains  its 
wholesale price, it may be replaced by another supplier that offers to reduce the price of its products 
or to provide additional services (e.g. in terms of delivery, packaging, merchandising, etc.) to secure 
access to the outlets of the buyer. 

This being said, there are certain well-defined exceptions to this general rule regarding the presumed 
lawfulness  of  ex-ante  agreed  conditions.478  Certain  contractual  provisions  or  trading  conditions 
agreed ex-ante could still be regarded as unlawful or unfair where it is generally accepted that they 
do not lead to efficiencies for both parties in the transaction. This could be the case, in particular, for 
contractual provisions or trading conditions on payment periods of more than 30 days for perishable 
products.  Payments  for  perishable  goods  that  exceed  30  days  seem  to  have,  indeed,  a  negative 
impact on investment and output at the farm level.479 

477 In this respect, the 2011 SCI's "Principles of Good Practice" mention as an example of fair practice a "transfer of 
risk which is negotiated and agreed by the parties to obtain a win-win situation," i.e. an increase of the size of the 
pie. 
478  Some  ex-ante  conditions  may  raise  issues  under  competition  law;  for  example  when  a  dominant  company 
offering exclusivity contracts to trading partners which play a pivotal role in the viability of the dominant company's 
competitors. 
479 Falkowski explained that actions involving "processors trying to rebuild their reputation and trustworthiness by 
paying on time and providing their suppliers with various assistance programmes" have been shown to have "a very 
profound and quite rapid positive effect on both investment decisions and output at the farm level," while pointing 
out the need for further research in order to understand better the mechanisms at play in such scenario. One potential 
explanation could be that small farmers face some frictions in their access to capital markets. See Jan Falkowski, 
2017, "The economic aspects of unfair trading practices: measurement and indicators," in Unfair trading practices 
in the food supply chain, JRC Technical Report. 

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3.2. EX-POST UNILATERAL CHANGES SHOULD GENERALLY BE PREVENTED IN SITUATION OF STRONG 
ASYMMETRY IN BARGAINING POWER 

In  contrast  to  what  we  discussed  above,  and  because  contractual  provisions  or  trading  conditions 
cannot  ultimately  cover  all  possible  aspects  of  a  trade  relation,  a  trading  partner  with  a  strong 
bargaining power might sometimes be able to unilaterally and retrospectively change a commercial 
agreement or a transaction in its favour or impose additional conditions which reduce or eliminate 
the efficiencies for the party which has no or weaker bargaining power.480 

Such ex-post modifications to the existing trade relationship could allow the trading partner with a 
strong bargaining power to capture the gains of the transaction that were originally allocated to the 
other partner or transfer the losses that the trading partner with a strong bargaining power should 
have kept, and, therefore, could qualify as UTPs.481 For instance, a last-minute order cancellation for 
perishable  goods  prevents  the  supplier  of  these  goods  from  finding  an  alternative  and  creates  an 
unexpected cost as well as additional uncertainty for future transactions. The buyer in addition has a 
reduced  incentive  for  appropriate  market  analysis  and  planning  for  future  transaction.  This  overall 
can  reduce  investments  and  reduce  overall  gains  for  future  transactions.  In  addition  when  the 
trading partner with weak bargaining power anticipates future unilateral and retrospective changes 
before reaching the agreement, this can diminish its incentives to innovate or force it to distort its 
orders or sales to some levels that are inefficient for the parties in the supply chain, and ultimately 
harm both parties. 

Claims for wasted or unsold products could generally be considered as ex-post practices, given that 
they  arise  due  to  a  modification  of  the  initial  terms  of  the  transaction  after  the  outcome  of  the 
transaction has been realised (i.e. after that parties realised there were wasted or unsold products 
due  to,  e.g.  improper  management  of  the  goods  or  lack  of  demand).  Claims  for  wasted  or  unsold 
products  can remove incentives to manage properly the flow and storage of products if the claims 
have  to  be  paid,  for  instance,  by  the  supplier  for  waste  created  at  the  premises  of  the  buyer.  In 
principle  the  costs  of  wasted  goods  should  be  borne  by  the  party  that  creates  such  waste.  Hence, 
claims  for  wasted  or  unsold  products  can  have  effects  similar  to  those  discussed  above  for  last-
minute order cancellations. 

3.3. THE FRONTIER BETWEEN EX-ANTE AND EX-POST 

There may be questions about the frontier between "ex-post" and "ex-ante" in the case, for instance, 
of  regular  negotiations  or  arrangements  between  two  trading  partners  to  continue  or  renew  their 

480  Note  however,  that  ex-post,  unilateral  UTPs  should  generally  already  be  covered  by  contract  law.  Dedicated 
regulation of such UTPs should be promoted only when it is clearly established that contract law is not sufficient to 
protect all trading partners, when, e.g. small players may not be fully aware of the law, or when it may be too costly 
for them to start a legal action. 
481  Similarly,  the  UK  Competition  Commission's  2008  Final  report  on  their  "Groceries  market  investigation" 
generally draws a distinction between e.g. an override agreed in advance, or imposed retrospectively (see Appendix 
9.8). 

265 

 
 
 
                                                 
agreements or trading conditions.482 In such case, ex-post unilateral changes could be interpreted as 
part  of  the  ex-ante  negotiation  tactics  with  respect  to  the  future  agreements,  or  e.g.  as  part  of 
standard adjustments to demand.483 

Unilateral  changes  occurring  after  the  parties  have  reached  an  agreement  or  have  started  the 
transaction  which  should  be  interpreted  as  part  of  ex-ante  business  practices  would  relate  to,  e.g. 
changes  in  the  previous  contracts  in  regard  of  supplies  which  are  about  to  be  ordered  (or  will  be 
ordered in the future), but not for supplies that were already agreed or ordered (which would be the 
case, for instance, for last-minute order cancellations in particular of perishable products) that could 
still qualify as a UTP. This is the case, for instance, when a large customer uses "delisting" as part of 
its recurring negotiations with a large manufacturer, such practice would typically be categorized as 
an ex-ante practice, as this corresponds to the case where the retailer simply stops ordering products 
from  the  manufacturer  and  thus  affects  future  orders.  Hence,  this  should  generally  be  allowed.484 
More generally, particular caution is advised when identifying trading practices in such situations, in 
particular when there are no strong asymmetries in the trading partners' relative bargaining power. 

There may also be questions about the frontier between "ex-post" and "ex-ante" in the case that a 
commercial arrangement includes vague provisions or clauses for key elements of the transaction or 
artificially sets that a condition will be determined ex-post. If it is possible to determine ex-ante such 
key  elements  (e.g.  percentage  contributions  to  promotions  or  specific  contributions  to  marketing 
costs), inserting a clause in a contract about the later determination of such elements only artificially 
makes the practice of determining such conditions an "ex-ante" practice.  It is more appropriate to 
consider this an ex-post practice when such clause exists, and when it is possible to determine such 
key  elements  ex-ante.  In  fact  the  trading  partner  with  stronger  bargaining  power  could  take 
advantage of this situation and could force the other party to agree that a contract remains vague or 
does not  clearly determine certain elements upfront so that the stronger  party can unilaterally set 
these  elements  once  sales  have  been  realized.  Indeed  in  such  a  case,  the  stronger  party  is  likely 
creating the same inefficiencies as discussed above for ex-post practices (which are not envisaged at 
all in the pre-transaction arrangements). 

3.4 APPLICATION TO SPECIFIC UTPs 

The  above-mentioned  distinction  between  provisions  or  conditions  agreed  ex-ante  and  which 
typically lead to efficiencies for both parties and practices that occur ex-post and reduce or eliminate 
the efficiencies for the weaker party can be applied to the specific unfair trading practices mentioned 
in the impact assessment.  

482 This is usually the case for instance between a manufacturer of branded goods and a retailer: both usually agree 
some  general  terms  of  trade  at  the  beginning  of  a  twelve-month  period  while  orders  and  specific  promotions  are 
decided at multiple points in time during the twelve-month period. 
483 As an example, variations in quantities ordered can be part of standard adjustments to demand, and can be also 
part of the discussion between the trading partners for future orders. 
484 This paragraph does not concern last-minute order cancellations of perishable products discussed above given 
that by definition a cancellation requires that a specific order has been placed in the first place. 

266 

 
 
 
                                                 
First, the following practices would generally belong to the set of ex-ante contractual provisions or 
trading  conditions  for  which  there  typically  exist  some  efficiencies  to  be  gained  and  shared  by  all 
trading parties: 

- "Contributions to promotional or marketing costs of buyer" 

- "Requests for upfront payments to secure or retain contracts". 

One  should  keep  in  mind  that,  absent  these  practices,  the  imbalances  of  bargaining  power  would 
remain and simply be applied to trading arrangements which are typically less efficient for all parties 
involved, generally leaving trading partners with no or weak bargaining power in a worse situation 
than when the practices are agreed upon ex-ante. 

However,  as  discussed  in  section  3.3,  in  specific  cases  where  the  two  above-mentioned  ex-ante 
practices  clearly  relate  to  unilateral  and  retroactive  changes  or  determinations  of  some  elements 
that  could  be  instead  determined  ex-ante,  they  could  exceptionally  qualify  as  ex-post  and  be 
regulated. 

In  addition,  certain  contractual  provisions  or  trading  conditions  agreed  ex-ante  could  still  be 
regulated where it is generally the case that they do not lead to efficiencies for both parties in the 
transaction. This is the case for "Payment periods longer than 30 days for perishable products". 

Note,  however,  that a  regulation  of  these UTPs  should take into  account all  the specificities  of  the 
various transactions in the food supply chain in the different Member States in order not to penalize 
both  farmers  and  other  trading  partners  by  limiting  the  scope  of  their  business  arrangements.  For 
instance, enforcing a strict payment period of 30 days could sometimes prove difficult under value-
sharing contracts for which the value to be split between trading partners is realized only at a later 
stage (e.g. for some cereals and other arable crops). 

Second,  practices  which  typically  belong  to  the  set  of  ex-post  practices  which  could  generally  be 
harmful to some trading partners when imposed in situation of imbalances of bargaining power are: 

- "Unilateral and retroactive changes to contracts" 

- "Last-minute order cancellations  concerning perishable products" 

- "Claims for wasted or unsold products". 

These practices could be addressed by a regulation on UTPs as there is only a very limited risk that 
such  regulation  would  eliminate  potential  efficiencies.  These  practices  would  typically  be  used  by 
trading  partners  with  strong  bargaining  power  in  order  to  capture  the  surplus  which  should  be 
owned by other trading partners while bearing almost no risk.  

267 

 
 
 
 
 
4. CONCLUSION 

As detailed above, UTP regulations should be very carefully tailored in order not to prevent trading 
partners  from  engaging  in  efficiency-enhancing  agreements  or  trading  conditions.  Moreover,  one 
should  recall  that  UTP  regulations  will  not  ultimately  prevent  the  existence  and  exercise  of  strong 
bargaining power through fair practices such as, for example, lower purchasing prices. 

This Annex advocates for a clear identification of a "black-list" of well-defined UTPs based on an ex-
ante  vs.  ex-post  criterion.  Regulation  focused  on  addressing  "ex-post"  UTPs  would  limit  the  risk  of 
preventing efficiency-enhancing behaviour and trading practices from taking place. In contrast, other 
approaches  such  as  a  "rule-of-reason"  as  advocated  by  Sexton  could  prove  more  complex  and 
challenging  to  implement  in  practice.  Such  rule-of-reason  type  of  approach  may  lead  to  over-
enforcement of the regulation and risks affecting efficiencies linked to commercial transactions in the 
supply chain.485 

As  presented  in  the  Annex,  distinguishing  between  practices  which  involve  ex-ante  commercial 
agreements or trading practices between parties and those which instead relate to ex-post unilateral 
decisions could provide some guidance to help defining a very precise "black-list" of UTPs. 

Prof. Tommaso Valletti 

Chief Economist, DG COMPETITION 

485 Sexton mentioned that a "rule-of-reason" regulatory approach may be the most appropriate to deal with UTPs. In 
particular,  he  proposed  "specific  criteria  for  adjudicating  a  rule-of-reason  standard.  The  first  criterion  would  be 
whether the alleged action had a clear efficiency motivation. Second, investigatory bodies should examine if simpler 
means than the alleged UTP were available to the accused party to extract economic surplus. A third criterion is to 
ask  if  the  business  relationship  in  question  is  likely  to  be  long  term,  with  it  being  unlikely  that  a  business  would 
disrupt a long-term relationship by engaging in UTP." See footnote 473 above. 

268