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Unfair trading practices in the agri-food supply chain in CEE

CMS Expert Guide

The functioning of the food supply chain has been subject to an analysis by the European Commission (the Commission) since 2008. One of the main findings was the existence of imbalances in bargaining power between business entities operating at different levels in the chain.

Following the findings, the Commission presented a proposal for directive (EU) 2019/633 of the European Parliament and of the Council (the Directive) that was eventually adopted on 17 April 2019. The Directive was to be transposed into the national laws of the EU Member States by 1 May 2021, but EU Member States were able to postpone this deadline until 1 November 2021.

The Directive provides a minimum level of protection, which means that EU Member States can choose stricter rules and go beyond its scope.

Protection of weaker suppliers against stronger buyers

The Directive protects suppliers, including farmers and producers’ organisations, against possible unfair behaviour by buyers, groups of buyers and public authorities. However, it does not apply to end consumers.

The Directive introduces an approach based on turnover figures, the aim of which is to protect suppliers against unfair trading practices by economically stronger buyers. The Directive introduces five turnover thresholds: up to EUR 2 million for micro entities; EUR 10 million for small entities; EUR 50 million for medium-sized entities; and two additional thresholds of EUR 150 million and EUR 350 million. The provisions of the Directive protect a supplier in cases where the buyer’s turnover is higher than the maximum turnover in the threshold category of the protected supplier. By way of exemption, a supplier that sells to a public authority and has an annual turnover up to EUR 350 million can rely on protection irrespective of this public authority’s turnover.

Importantly, the turnovers of suppliers and buyers must be determined on the basis of the turnovers of the capital groups to which they belong.

Prohibited unfair trading practices

The Directive does not prohibit unfair trading practices in general but targets those practices that are considered to be the most harmful. It prohibits 16 specific unfair trading practices and distinguishes between black and grey activities. While black unfair trading practices are prohibited in all circumstances, grey practices are allowed if the supplier and buyer agree in advance in a clear and unambiguous manner.

The black unfair trading practices include late payments for agricultural and food products, short-notice cancellations, unilateral contract changes by the buyer and commercial retaliation by the buyer, etc. On the other hand, grey practices concern, e.g. payments by the supplier for promotions, and marketing and advertising offered by the buyer.


Under the Directive, EU Member States are obliged to designate an authority to enforce the prohibitions set down in it. EU Member States have to grant enforcement authorities a minimum number of powers, including most importantly the power to impose fines on buyers who engage in unfair trading practices, to publish decisions and to initiate and conduct investigations on the basis of a complaint as well as on their own initiative.