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POSITIONS 05 March 2018

Eight EU associations and NGOs call for EU legislation on Unfair Trading Practices

Together with seven associations and NGOs from the food supply chain, AIM calls on the European Commission to propose legislation to combat unfair trading practices in Europe. The letter signed by the European Brands Association AIM, the European Council of Young Farmers Ceja, the Liaison Centre for the Meat Processing Industry in the EU CLITRAVI, Copa-Cogeca representing European Farmers & European Agri-Cooperatives, the European Federation of Food, Agriculture and Tourism Trade Unions EFFAT, the Fair Trade Advocacy Office FTAO, FoodDrinkEurope and Oxfam International emphasises the need for the EU to establish a fair, transparent, equitable and sustainable food supply chain that can benefit all its actors. Now is the time to act in order to protect the economic, social and environmental sustainability of the food supply chain and consequently strengthening Europe’s competitiveness and growth to build a stronger and more inclusive Europe.

According to regular surveys conducted since 2011, AIM members, large and small, are seeing an increasing trend of unfair trading practices in the supply chain among commercial partners. The latest AIM survey reveals that 97% of companies were exposed to at least one UTP in 2016 – a situation that clearly identifies UTPs as a major issue for European brand manufacturers, whatever their size. This is contrary to the principles of good faith and fair dealing, and has detrimental effects on European competitiveness with more resources tied up in dealing with unfair practices, and consequently less time and resources being available for innovation, investment and creating value for the consumer.

In this context, one of the priority of the European Commission should be to address the practices of European Retail Alliances. Since the report of the European Commission on unfair trading practices was published in January 2016, a major transformation has happened on the market with an increasingly negative impact of European Retail Alliances:

  • The size of the European Retail Alliances, composed of the largest European retailers, gives them a bargaining power that jeopardizes the contractual freedom of the other party and its ability to refuse unfair conditions.
  • According to a recent AIM survey, 69% of abuses reported by AIM members came from European Retail Alliances.
  • Some national authorities like DGCCRF in France recently raised concerns on these alliances, which could be a way to circumvent national rules.
  • In addition, the European Parliament called the European Commission to pay more attention to the impact of these alliances.
  • Despite numerous requests, none of the European Retail Alliances has registered to the Supply Chain Initiative – together for good trading practices.

Therefore, AIM urges the European Commission to propose legislation that addresses unfair trading practices in the supply chain.

An EU legislative framework is needed to:

  • provide a harmonised basic framework setting up minimum standards for practices and enforcement.
  • cover all grocery products and operators.
  • not undermine the collaboration between suppliers and purchasers looking for fair relationships.
  • address UTPs of European Retail Alliances that have by nature a transnational scope and impact.
  • be based on the list of manifestly unfair trading practices unanimously agreed by representatives of the entire food chain in 2011.

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