The EU Unfair Trading Practices Directive

Update

AGRINFO, FairTrade Advocacy Office, and Oxfam Belgium co-organised this webinar for non-EU suppliers of agri-food products who trade with EU buyers, or who are considering entering the EU market. The webinar provided an overview of Directive 2019/633 on unfair trading practices (UTP) in business-to-business relationships in the agricultural and food supply chain. Practical examples and explanation on how to engage with the Directive revision process followed.

What is changing?

Directive 2019/633 on UTP in business-to-business relationships bans 16 unfair trading practices that are classified as black and grey practices.

Black trading practices are never allowed. They currently include:

• payment later than 30 days for perishable agricultural and food products
• payment later than 60 days for other agri-food products
• short-notice cancellations of perishable agri-food products
• unilateral contract changes by the buyer
• payments not related 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.

Grey trading practices are only allowed if the supplier and the buyer agree on them beforehand. They include:

• return of unsold products
• payment by the supplier for stocking, display, and listing; promotion; marketing; advertising; staff of the buyer, fitting out premises.

These bans apply to suppliers located outside the EU if the buyers are located within the EU.

Why?

In the agricultural and food supply chain, large imbalances in bargaining power between buyers and suppliers can lead to UTPs, such as imposing one-sided contractual terms or transferring disproportionate economic risks.

The UTP Directive aims to achieve a more efficient and fairer food supply chain by protecting agri-food suppliers selling directly to buyers in the EU against UTPs. Non-EU agri-food suppliers are also protected by these rules.

Timeline

The UTP Directive has applied since 2022, and a revision is planned.