European Commission calls for action on unfair trading practices in supermarket supply chains

Gurjit Degun
16 July 2014

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16 July 2014 | Gurjit Degun

The European Commission is calling on member states to improve protection for small food producers against unfair trading practices from supermarkets.

Increased market concentration has led to different levels of bargaining power between parties in the food supply chain, the European Commission explained.

“While differences in bargaining powers are common and legitimate in commercial relationships, these imbalances can in some cases lead to unfair trading practices,” it added.

The Commission said unfair practices include: avoiding or refusing to put essential commercial terms in writing; retroactive unilateral changes in the cost or price of products or services; transfer of unjustified or disproportionate risk to a contracting party; deliberately disrupting a delivery to obtain unjustified advantages; or unilaterally terminating a commercial relationship without notice.

The Commission suggested three steps that nations could take: supporting a voluntary code of conduct, taking on EU-wide standards for principles of good practice, and implementing effective enforcement at a national level.

Michel Barnier, commission vice-president for internal market and services, said: “There needs to be a level and fair playing field between SME food suppliers and retailers on one side and large multinational manufacturers and supermarkets on the other side. Unfair trading practices jeopardise this.

“The industry has already made important and valuable efforts to address unfair behaviour and should continue doing so. Member states should ensure that they have effective and consistent regulatory frameworks in place to build on and complement self-regulatory initiatives.”

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