Most terms in contractual relations are the result of tough but fair negotiations between trading partners. However, sometimes "weaker" business partners are confronted by unfair trading practices (UTPs) and do not speak up in fear of losing the commercial relationship. UTPs initiatives at national, EU and ECN level initially focused on the food supply chain but have now been extended to the non-food side. At national level, pilots have been set up with a number of representatives of the agro-food sector and the textiles industry to implement a code of conduct similar to the "Principles of Good Practice" drafted by the Expert Platform set up by the European Commission within the framework of the High Level Forum for a Better Functioning Food Supply Chain. At EU level, the European Commission is taking stock of UTPs in both the food and non-food sector through a Green Paper. Interested parties have until 30 April 2013 to submit their views to the Commission on how best to beat the "fear factor".
The significant increase in EU food prices at all levels of the supply chain over the last years caused the NMa (now ACM[)8], the European Commission and other national competition authorities within the European Competition Network (ECN) to look into the functioning of the food supply chain and the use of UTPs. The main conclusion of these initiatives is that the competition rules are not the best tool to tackle most UTPs. At ECN level, a large number of ECN competition authorities identified UTPs in the food sector linked to imbalances in bargaining power which escape the prohibition against abuse of a dominant position. Similarly, at national level an NMa study on pricing "from farm to fork" concluded that supermarkets are not dominant in the pricing process of food products despite significant food price increases and thus remain untouched under the competition rules. The Minister of Economic Affairs recently commissioned a study on how best to deal with UTPs in contractual negotiations. According to this study, UTPs can be tackled through self-regulation, provided a code of conduct is drafted with clear-cut rules on what qualifies as an UTP, combined with an effective enforcement mechanism. Pilots in the agro-food and textiles sectors to draft such a code of conduct have now been set up with the minister's support. The first results of these pilots are expected to be published in early 2014.
So far, the European Commission has kept a low profile in resolving UTPs as it considers most cases in the food sector to have a national dimension, falling under the responsibility of the national competition authorities. But the increased concentration and vertical integration across the EU in the B2B food and non-food supply chain have moved the Commission to action. In 2009, the Commission adopted a Communication aimed at improving the functioning of the food supply chain in the EU in 2009. A High Level Forum for a Better Functioning of the Food Supply Chain was set up to implement, among other things, the initiatives proposed in the Communication. This resulted in a set of Principles of Good Practice in vertical relations in the food supply chain, currently being implemented on a voluntary basis by a number of trade associations active in the European food supply chain. Furthermore, a "Task Force Food" was established within DG Competition in 2012 to keep an eye on the food sector for a period of two years. And most recently, a Green Paper was launched to assess the different options to resolve UTPs at either national or EU-level by identifying seven types of UTPs together with possible fair practices. Interested parties have until 30 April 2013 to submit their views. The Commission will use these views to come up with appropriate next steps in the second half of this year.