Specific rules against unfair trade practices in the agricultural and food supply chain, provided in EU Directive 2019/633, have been transposed into Belgian law and incorporated into Book VI of the Code of Economic Law. The objective of these new rules is to better protect suppliers of agri-food products against unfair practices from buyers such as large food processors or retailers.
Suppliers of agri-food products are considered to be particularly vulnerable due to various factors (successive reforms of the Common Agricultural Policy, paradigm shift with regard to price support, removal of trade barriers, etc.) which have made their incomes highly volatile. The new rules on unfair practices aim to establish a minimum standard of protection which is intended to benefit the farming population as well as other agri-food suppliers of small and medium size, i.e. whose turnover is less than EUR 350 million.
With regard to the practices that are considered as unfair under the new rules, some are prohibited under any circumstance (black list), others can be permitted if the supplier and the buyer agree on them in advance in a clear and unambiguous manner (grey list).
The unfair practices included in the black list are, among others, payment terms that are longer than 30 days, cancellation terms that are too short, unilateral change to essential terms of a supply agreement, payment requests that are not related to the sale of the products, payment requests for deterioration or loss of the products occurring on the buyer’s premises and without any fault on the supplier’s part.
The unfair practices contained in the grey list are, among others, return of unsold agri-food products by the buyer to the supplier without paying for these products, payment requests for stocking, displaying, listing or making the products available on the market, payment requests for the advertising or marketing of the products by the buyer.
The Belgian enforcement authority appointed to investigate and sanction unfair commercial practices in the agri-food supply chain is the General Directorate of the Economic Inspection of the FPS economy. That authority, acting on basis of a complaint or on its own initiative, is competent to investigate, issue a warning, propose a settlement, impose administrative fines and order the publication of its decisions.
The new rules entered into force on 25 December 2021. Existing agreements have to be amended by 25 December 2022.
It should be noted that the specific rules on unfair practices in the agri-food supply chain are complementary to the general rules on unfair trading practices and unfair commercial terms introduced by the Belgian legislator in 2019 which apply to all B2B relationships.
Please contact Pierre de Bandt or Jeroen Dewispelaere for further information about this reform or for general legal advice relating to Belgian and European competition law.