The European Union's new regulation on unfair trading practices in the agri-food chain, Regulation (EU) 2026/697, is meant to strengthen the hand of farmers and small suppliers in disputes with buyers based in another member state. It came into force earlier this year and will apply from 10 September 2027.
The regulation does not add new prohibitions. It builds on the 2019 unfair trading practices directive, which bans 16 practices: ten outright and six unless buyer and supplier agree. The outright bans include paying later than 30 days for perishable agri-food products or later than 60 days for others, cancelling orders of perishable goods at short notice, changing contracts unilaterally, shifting the risk of loss to the supplier and commercial retaliation. Returning unsold products and charging suppliers for shelf space, promotion, advertising or marketing are allowed only by agreement.
The problem the new rules address is enforcement. Because a state's powers stop at its borders, national authorities found it hard to act when the buyer was established in a different member state, and enforcement was uneven. The regulation lets an enforcement authority take investigative steps on behalf of an authority in another member state, within its own territory, and limits the grounds on which authorities can refuse to cooperate.
Gerard McElwee, a partner at the law firm Squire Patton Boggs, told FoodNavigator that the focus on food and agriculture reflects the gap in bargaining power between farmers and large manufacturers and retailers, which he said is "not as stark" in other sectors. Many food products are perishable, which makes late cancellations especially damaging, and the sector is exposed to climate change and disease.
Farmers are the main beneficiaries, McElwee said, because complaints against buyers in other member states should become easier to handle. Ingredient suppliers and food manufacturers can sit on either side of a deal, and the larger they are, the more likely they are to be affected negatively. Retailers, he said, are the "main losers from the regulation".
The directive is already enforced. In Bulgaria the Commission on Protection of Competition recently fined the retailer Kaufland Bulgaria EOOD & Co KD €76 million, and the EU counts 754 infringements found, in roughly one third of investigations. McElwee advised companies to check their supply agreements against both the directive and the new regulation before it applies.
The report is by Augustus Bambridge-Sutton.
Photo: Simon Speed / Wikimedia Commons (CC0)
Source: FoodNavigator
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