Political Hotspot February 2019

On a surprise-meant-to-be-Christmas-gift trialogue that took place on 19 December 2018, the three European institutions reached a final agreement on the Unfair Trading Practices (UTPs) directive [1]. In a press release published by IFOAM EU on 19 December, President Jan Plagge welcomed this directive and the strong political commitment towards seeking to improve the position of weaker actors against UTPs. He added that “a minimum harmonized standard at EU level was needed on the issue of unfair trading practices” and hoped that “adequate collaboration between Member States competent authorities will make sure that this directive is adequately enforced”.

The legislative text was proposed by the European Commission in April 2018 to counteract the fact that “micro, small or medium suppliers are particularly vulnerable to unfair trading practices and least able to weather them without negative effects on their economic viability”. While the AGRI committee was lead negotiator in the Parliament, also three other committees – IMCO, ENVI and DEVE – voiced their opinion on the content of this legislation given its importance.

IFOAM EU published a position paper on the matter and collaborated with other NGOs such as Oxfam, Traidcraft and Fair Trade in order to advocate for a fairer and more far-reaching proposal. The two most contentious issues were the scope in terms of actors covered by the directive and the list of prohibited UTPs. The final text includes most of the points that IFOAM EU had advocated for along with other NGOs, which ensure a greater protection of the most vulnerable actors in the food supply chain than initially proposed. Main points of the final text are:

  • The scope in terms of actors covered has been extended to suppliers up to a turnover of 350 million EUR. Suppliers are grouped into five categories based on annual turnover in million EUR (0-2; 2-10; 10-50; 5-150; 150-350). Suppliers are protected only if the buyer fits into a larger category; suppliers are not protected from buyers of the same category;
  • The list of prohibited UTPs has been extended from 8 to 15 and includes e.g. short notice cancellation of orders (less than 30 days), unilateral changes to the supply agreement, requiring a supplier to pay for the costs of customer complaints;
  • The right to file a complaint has been extended to organisations with a legitimate interest in representing suppliers, and not only to producers’ organisation;
  • A review clause has been included, the review period being of 4 years.

The European Parliament is set to vote on the final proposal in the second March plenary, and the final directive should be published in the Official Journal by May, prior to the end of the current legislature. The transposition period for publishing the national law is 24 months; 30 months for that law coming into force.
IFOAM EU thanks all its members and the NGOs that participated in this process with us!

[1] 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

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