The European Commission has published its implementation report on the Directive on Unfair Trading Practices (UTPs) in the Agri-Food Supply Chain, outlining how member states have transposed the rules on unfair trading practices and announcing new rules on cross-border enforcement. As a result, EuroCommerce has presented its reaction.

Christel Delberghe, Director General of EuroCommerce, the association representing European retailers and wholesalers of all sizes, commented:

"The report provides an initial overview of the national implementation of the Directive on Unfair Trading Practices. We urge the Commission to take time to assess whether the rules are achieving their objective of improving farmers' position in the food supply chain.

Furthermore, the process should be fair, transparent, and solicit the views of all stakeholders in the supply chain, including retailers, wholesalers, and consumers. An implementation report is not the place to announce new initiatives without even calling for evidence."

As a measure based on treaty provisions in the field of agriculture, the Commission must assess whether the directive has achieved the expected effect of improving farmers' position in the food supply chain.

Through the transposition process, member states have added many provisions that have little to do with the objective of protecting farmers, e.g., by unilaterally protecting large suppliers. This is in contradiction with the warning given by the Chief Economist of the Competition Commission at the time of the initial proposal, which warned that giving power to large suppliers, who already have considerable market power, could be detrimental to consumer prices.

Questions remain about the compatibility of the additional rules introduced by member states with the Single Market, while the Letta Report warns against the renationalization of procurement, which often underpins these rules.

Emotions have heightened amid farmer protests since the beginning of 2024. New rules on cross-border enforcement of UTPs are announced without prior publication on the Commission's Have Your Say portal, well ahead of the directive's review date in 2025. There is still a lack of transparency about what these new rules will address that basic EU legal principles or private international law do not cover.

Given that the implementation report acknowledges that "compliance checking assessing the compatibility of national implementation measures with the directive is not yet finalized," it is hard to understand how the Commission is already prepared to address "issues" and do so without an impact assessment, finds EuroCommerce.

Similarly, the implementation report notes that the rules were transposed by all member states only in December 2022. Others, adopted earlier, came before the series of crises that hit agricultural production in the EU, including the Covid pandemic, energy crisis, and high inflation.

This underscores the need to spend time assessing existing rules in consultation with all stakeholders so that an evaluation based on a proper understanding of relationships in the food supply chain can be made.

EuroCommerce is ready to engage with the Commission in evaluating the directive to improve the position of small primary producers to ensure that the EU's agri-food ecosystem remains competitive and able to invest in sustainability transition for the benefit of all actors and consumers in the supply chain.

Retailers and wholesalers play only a small role in distributing agricultural products, with much of agricultural production being exported, destined for processing, hospitality, or not being edible.

Many retailers and wholesalers use their relationship with farmers and supply chains to support the transition to more sustainable practices, and EuroCommerce participates in the Strategic Dialogue in Agriculture to find common ground for the future of the EU's agri-food sector.

Transforming the agri-food ecosystem will require collaboration in the supply chain. Excessive reliance on rules on unfair trading practices will not solve the problems faced by farmers. In addition to this assessment, more must be done to enhance farmer cooperation or scale, differentiation, or investment in sustainability transition.