EU Moves To Ban Late Payments In Food Supply Chain

12. April 2018.








The European Commission (EC) is introducing new measures to safeguard the market’s food supply chain and support suppliers in the industry.

In a press release issued by the EC on Thursday (April 12), the regulator said it is targeting unfair trade practices, including late payments that it says have negatively impacted small and medium-sized businesses in the food industry.

“There are imbalances of bargaining power in the food supply chain, and with this proposal the Commission is tackling the unfair trading practices head on,” said the Commission’s Vice President Jyrki Katainen, who is responsible for Jobs, Growth Investment and Competitiveness. “We act because unfair business conduct undermines the economic viability of operators in the chain. By setting minimum standards and reinforcing the enforcement, the proposal should ensure that these operators are able to compete on fair terms, thereby contributing to the overall efficiency of the chain. This is a clear statement for more fair business conduct.”

In addition to late payments for perishable food products, the Commission has proposed a ban on last-minute supplier order cancellations, contract changes that require suppliers to pay for food waste and a ban on other practices that address unfair charges and practices with suppliers unless agreed upon during contract negotiations.

Member states will be required to create a public authority to enforce the new rules and to sanction companies that have been found to be in violation of them, the Commission said.

“Any chain is only as strong as its weakest link. An efficient and effective food supply chain is a fair one,” added Phil Hogan, agricultural and rural development Commissioner. “Today’s proposal is fundamentally about fairness — about giving voice to the voiceless — for those who, through no fault of their own, find themselves the victims of a weak bargaining position. Today’s initiative to ban unfair trading practices is about strengthening the position of producers and SMEs in the food supply chain. The initiative is equally about providing strong and effective enforcement. We are looking to eliminate the “fear factor” in the food supply chain through a confidential complaints procedure.”

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