Unfair trading practices (UTPs) in business-to-business relationships undermine acceptable commercial conduct and violate principles of good faith and fair dealing. The food supply chain is especially vulnerable to these practices due to significant imbalances between small and large operators. Farmers and small businesses often lack sufficient bargaining power to protect themselves from UTPs.
Through the EU Directive 2019/633 on unfair trading practices in the agricultural and food supply chain, the European Union decided to improve the protection of farmers – as well as of small and medium sized suppliers – and provide mandatory rules that outlaw certain unfair trading practices.

These ten black unfair trading practices are strictly prohibited: 

• Payments beyond 30 days for perishable agricultural and food products
• Payment beyond 60 days for other agri-food products
• Short-notice cancellations of perishable agri-food products
• Unilateral contract changes by the buyer
• Payments unrelated to a specific transaction
• Risk of loss and deterioration transferred to the supplier
• Refusal of a written confirmation of a supply agreement by the buyer, despite request from the supplier
• Misuse of trade secrets by the buyer
• Commercial retaliation by the buyer
• Transferring the costs of examining customer complaints to the supplier

These six grey unfair trading practices are allowed, only if agreed beforehand in a clear and unambiguous manner:

• Return of unsold products
• Payment of the supplier for stocking, display and listing
• Payment of the supplier for promotion
• Payment of the supplier for marketing
• Payment of the supplier for advertising
• Payment of the supplier for staff of the buyer, fitting out premises

When incorporating the Directive into their national laws, EU countries could opt to implement stricter measures and exceed its scope. However, they could not provide less protection than what the Directive stipulates. Each EU country has appointed a competent authority responsible for enforcing these rules. These authorities must have the power to initiate investigations and impose fines on operators who violate the rules.

Further information:

• Brochure: Directive on unfair trading practices in the agriculture and food supply chain

• Report - Implementing the prohibition of unfair trading practices to strengthen the position of farmers and operators in the agricultural and food supply chain – State of play

Related regulations:

• Directive (EU) 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain