On December 10, 2024, the European Commission adopted a proposal for a regulation aimed at promoting cooperation between the competent authorities for monitoring the application of EU Directive 2019/633 on unfair trading practices in the agri-food supply chain. (1)
1) UTPs Directive, chronicle of a failure
Unfair Trading Practices (UTPs) Directive EU 2019/633 was supposed to re-establish balance in the unfair contractual relations between the agri-food production chain – made up of millions of mainly small or microscopic businesses – and its large buyers, in retail and large industry. (2)
The directive has unfortunately failed in its objective, as the protesting farmers continue to denounce from January 2024 to date, for a few simple reasons:
– below-cost sales of agri-food products have not been included in the black list of commercial practices that are always prohibited. Producers are therefore often forced to sell their goods below production costs; (3)
– some Member States, such as Italy, have introduced illegitimate derogations in favour of cooperatives, producer organisations and their associations, thus drastically limiting the protection of agricultural and food processing companies; (4)
– Member States have transposed the Directive and carried out checks on the correct application of its principles in variable and rarely effective ways.
2) Unfair trade practices, the proposed EU regulation. Objectives
The proposed regulation under examination, as reported in the premises, does not interfere with the process of re-evaluation of the Unfair Commercial Practices Directive, which operators are eagerly awaiting. Instead, it pursues the objectives of:
– ensuring its consistent application by supervisory authorities in the Member States, as well as
– fostering cooperation between them in cases of cross-border supplies of agri-food products (estimated on average at 20% of the total).
Choosing a regulation – in compliance with the principle of subsidiarity (and therefore, the autonomy of Member States in administrative and judicial procedures) – responds to the need to ensure a harmonized level of protection. In line with the Official Controls Regulation (EU) No 2017/625.
3) Mutual assistance mechanism
The enforcement authority of a Member State may request from the corresponding authority of another Member State:
– ‘the information required to establish whether an unfair commercial practice with a cross-border dimension has occurred or is occurring in the Member State of the requesting enforcement authority’. The authority consulted ‘provides without delay, and within 60 days unless otherwise agreed’, the information requested (Article 5);
– the adoption of implementing measures (i.e. investigations), by the requested authority, with the participation, where required, of representatives of the requesting authority. With obligation to update on the measures adopted (Article 6);
– the enforcement of final decisions imposing pecuniary or other sanctions, provided that they are equally effective, as well as provisional measures. Only when the requesting authority has verified that the addressee of the decisions does not have sufficient assets on its territory (Article 7).
3.1) Notifications and mutual assistance procedures
An authority entrusted with the enforcement of the UTPs Directive shall notify all the corresponding authorities concerned of any decision establishing the occurrence of an unfair commercial practice with a cross-border dimension in its territory, within one month of its adoption (Article 8).
The request of mutual assistance must be in written form and include all relevant and necessary information for this purpose, ‘including information which can only be obtained in the Member State of the requesting executing authority'(Article 9).
3.2) Refusal of mutual assistance
The refusal of the request for mutual assistance – with regard to information (Article 5) – is permitted in cases where:
– following a consultation with the requesting authority, the information requested is not necessary for the latter to establish whether an unfair commercial practice with a cross-border dimension has occurred or is occurring;
– criminal investigations or legal proceedings have already been initiated against the same buyer for the same unfair trading practice by the authorities of the Member State of the requested enforcing authority or the requesting enforcing authority.
Enforcement of decisions of the requesting authority (under Article 7) may in turn be refused in cases where:
– criminal investigations or legal proceedings have already been initiated, a judgment has been issued or a court settlement has been reached in relation to the same unfair commercial practice before the judicial authorities of the Member State of the requested enforcing authority;
– the exercise of the necessary enforcement powers has already been initiated or an administrative decision has already been adopted in relation to the same intra-EU infringement and against the same professional in the Member State of the requested authority, ‘in order to quickly and effectively put an end to the unfair commercial practice itself’;
– a criminal investigation or legal proceedings have already been initiated against the same purchaser for the same unfair commercial practice by the judicial authorities of the requesting State;
– the requesting executing authority has not provided the necessary information pursuant to Article 5 (Article 10).
4) Unfair cross-border trade practices
‘Where there is a reasonable suspicion of a widespread unfair trade practice with a cross-border dimension, the law enforcement authorities affected by this practice shall initiate coordinated action’. On the basis of an agreement between them that includes the designation of the coordinating authority.
‘The start of the action coordinated is notified to the Commission without delay’(Article 11).
‘The enforcement authorities involved in the coordinated action shall ensure that investigations and inspections are conducted in a coordinated manner. They shall seek to conduct investigations and inspections and, to the extent that national legislation allows, to apply provisional measures simultaneously’(Article 15).
5) Provisional conclusions
A European regulation is what farmers and food processors have been waiting for, for an effective reform of the entire discipline of ‘unfair trading practices’ that have plagued this productive sector for more than 20 years. With the aim of establishing identical rules, with regard to prohibited trading practices as well as the criteria to be followed in ‘enforcement’ activities.
The rules proposed – beyond the suggestions contained in the Commission press release (5) – is instead limited to establishing the methods of cooperation between the authorities, on the basis of principles already defined in the UTPs directive. Without adding any requirement to ensure the effectiveness of the activities to combat unfair commercial practices nor, above all, defining once and for all the absolute ban on #salesbelowcost.
Yet another mockery of farmers and food processors in the European Union, benefiting as always the financial oligarchies that control the retail giants and big industry. (6)
#Égalité, #PaceTerraDignità
Dario Dongo
Footnote
(1) Proposal for a Regulation of the European Parliament and of the Council on cooperation among enforcement authorities responsible for the enforcement of Directive (EU) 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain (COM/2024/576 final) https://tinyurl.com/ye99e57f
(2) Dario Dongo. Unfair commercial practices, the EU directive 2019/633. FT (Food Times). May 4, 2019
(3) See paragraph 3 of the previous article by Dario Dongo. Sales below costs, farmers protest in France. GIFT (Great Italian Food Trade). 21.1.24
(4) See paragraph 1.a of the previous article by Dario Dongo. #FarmersUnited, the manifesto 2 March 2024. GIFT (Great Italian Food Trade). 27.2.24
(5) European Commission. Commission proposes new measures to strengthen farmers’ position in the agri-food supply chain and enhance cross-border enforcement against unfair trading practices. Press release. 10.12.24 https://tinyurl.com/muutw66
(6) Dario Dongo. The tentacles of finance on food sovereignty and our food. GIFT (Great Italian Food Trade).
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
