B2B Payments

EU Bans Unfair Food Supply Chain Practices

The European Commission has introduced new measures to protect farms in the EU food sector against unfair supply chain practices, the body said in an announcement Wednesday (Dec. 19).

The European Commission, along with the European Parliament and European Council have reached an agreement to introduce a ban on 16 supply chain practices deemed unfair to players in the agriculture and food supply chain, particularly farmers.

The measures come after the EC tabled the legislative changes earlier this year, and noted that the bans mark the first EU-wide legislation implemented in the food supply chain space.

Industry retailers, food processors, wholesalers, cooperatives and producers’ organizations, and single producers will all be included under the regulatory requirements that ban unfair practices including late payments on perishable food products, last-minute order cancelations, retroactive contract changes, or forcing vendors to pay for any wasted food products.

“Today’s agreement paves the way for a first-time EU law which provides significant protection for all EU farmers, their organisations as well as small and mid-range businesses,” said Phil Hogan, Commissioner for Agriculture and Rural Development, in a statement. “They will now be protected against all bigger operators acting unfairly and outside the rules. I would like to express my appreciation to all the negotiators, whose constructive approach and hard work ensured today’s political agreement. I am particularly pleased that the agreement was achieved within a remarkably short eight months of the proposal’s presentation by the Commission.”

Other supply chain practices will require upfront, unambiguous agreement between both buyer and supplier under the new rules, including the practice of buyers charging a vendor to maintain a supply agreement, or a vendor paying for a buyer’s marketing or advertising initiatives.

The European Commission assured the new law will now drive up prices for end-consumers, while individual member states will also have the power to introduce further measures if they choose to do so.


Featured PYMNTS Study:

More than 63 percent of merchant service providers (MSPs) want to overhaul their core payment processing systems so they can up their value-added services (VAS) game. It’s tough, though, since many of these systems date back to the pre-digital era. In the January 2020 Optimizing Merchant Services Playbook, PYMNTS unpacks what 200 MSPs say is key to delivering the VAS agenda that is critical to their success.