Battle over unfair trade practices ends, its champion rejoices

Socialist MEP Paolo De Castro smiling at the press conference after the vote on the new anti-UTPs rules. [CUGNOT/European Parliament]

On Tuesday (12 March), the European Parliament approved long-awaited legislation on unfair trade practices (UTPs). MEPs backed it with 589 votes in favour, 72 against and nine abstentions. EURACTIV.com spoke with the lawmaker who shepherded the new rules over the line.

The lack of anti-UTPs rules was one of the major backlogs of the entire EU legal framework on foodstuffs, as 20 member states had in the meantime already adopted their own legislation on the topic.

The new directive aims to redress the imbalances in the EU food supply chain created by large operators against trading partners with weak bargaining power – which is why many lawmakers compared the end result to the biblical story of David and Goliath.

And it was rapporteur Paolo De Castro (S&D) who fired the slingshot.

The socialist MEP made no attempt to hide his satisfaction for having completed in eight months a political file going on since the first resolution of the Parliament called for measures to tackle UTPs in 2010.

MEPs and ministers make final bid for deal on unfair trade practices

Both the current Austrian and incoming Romanian presidencies asked rapporteur Paolo De Castro to return to the negotiating table ‘in the spirit of Christmas’ for an unexpected final round on unfair trade practice (UTPs) scheduled for today (19 December).

Benefits

“The immediate benefits of the UTPs directive in the food sector concern, first of all, the extension at the EU level of a minimum basis of protection from these practices,” De Castro said.

But it also has a multiplier effect on the effectiveness of the rules for member states like France, Spain and the UK, which have already implemented forms of anti-UTPs law in their national legislation.

“A French farmer who exported to Germany and who suffered an unfair practice had no protection. Today, however, the directive gives him the same protection he has in France,” he said.

The directive also eliminates the interpretation risks about what is and what is not considered an unfair practice, by setting up a fixed list of 16 UTPs.

“There is a substantial legal difference than in the past because now the national authority called upon to rule on a potential UTPs case must no longer find out if the alleged practice is unfair, but just if the supplier who had suffered that practice has a trade relationship with those who committed it,” the MEP explained.

Implementation

De Castro sees no risk regarding implementation of the directive in the member states.

“The directive is written and must be applied exactly as it is written, so there are no major challenges in this regard. National laws that go beyond directives will not have any problem continuing to go beyond them,” he said.

For instance, France now has a much broader list of unfair practices than the one set out in the directive, but both national and European rules will be integrated easily, according to De Castro.

“But it was important to make a qualitative leap in those countries where national rules were not working, like in Italy, or in the eight countries that had no legislation at all,” he said.

The true challenge for the implementation is more time-related, but De Castro expected national parliaments to transpose the directive within two years.

Negotiations

De Castro has already dealt with thorny legislative dossiers, as he was the negotiator for the last Common Agricultural Policy (CAP)  but also the so-called Omnibus regulation, a set of technical improvements to the CAP.

However, it was the first time he confronted the retail and wholesale sectors in Europe, represented by EuroCommerce.

EU retailers pressure MEPs to kill unfair trade practices proposals

Retailers are putting pressure on EU lawmakers to postpone a much-awaited vote next week on the European Commission’s proposed directive on unfair trade practices, EURACTIV.com has learnt.

“The large retailers lobby was very tough and effective,” De Castro admitted, adding that the whole experience was challenging because he had to deal with interlocutors other than the farmer associations and cooperatives to which he was accustomed.

“I noticed some ministers for agriculture, particularly in the Council’s Special Committee on Agriculture (SCA), having troubles in getting down to business,” he said.

Spaniards and Italians were braver, according to De Castro, but also the British, who  remained committed to the procedure, despite Brexit.

“What aroused my curiosity was seeing the French government, in principle strongly in favour of the UTPs, barely getting the floor during the meeting,” he said.

But the retail lobby was able to land a few punches as well, even in the Parliament, as they sent a letter to the presidents of the parliamentary groups asking for a postponement of the vote on entering into negotiations with EU ministers in October.

“I was impressed that 170 MEPs voted against – mark well: they did not abstain – entering into negotiations. We reached all the same an overwhelming majority with 428 votes, but it was significant,” he admitted.

[Edited by Zoran Radosavljevic and Sam Morgan]

Supporter

FoodDrinkEurope

FoodDrinkEurope is the organisation of Europe’s food and drink industry. Our supply and manufacturing chains are largely integrated across the EU, whether for small or large businesses, and so is the intra-EU trade. The free circulation of goods guaranteed by the Single Market is essential to a competitive food industry, to uphold its 4.2 million jobs and its growth ambition.

www.fooddrinkeurope.eu


For a Single Market with a purpose

For a Single Market with a purpose

The EU food and drink industry, the largest manufacturing sector in terms of turnover, value added and employment, is a strong advocate for a real Single Market. To that end, FoodDrinkEurope calls for:

  • High-level political commitment towards the Single Market, leading to a long-term vision
  • Prioritisation of Single Market issues at EU level focusing on a strong, competitive and sustainable supply chain
  • High-level coordination to ensure a relevant regulatory framework to support European industry
  • Improved functioning of mutual recognition in the non-harmonised areas

Read our Manifesto and find out more.


Industry working with farmers

The food and drink industry builds long-term partnerships with Europe’s farmers to secure a local agricultural supply, creates value and develops market opportunities for agricultural products and connects farmers and consumers in the food chain.

Find out more in our latest report.


Brexit

FoodDrinkEurope aims to play an active role in the Brexit process. Our goal is to ensure the least disruptive outcome for the food and drink sector at large.

Click here to read FoodDrinkEurope's recommendations on the Brexit negotiations.


"Small Scale, Big Impact": Europe"s food and drink SMEs

Out of 289,000 food and drink companies in Europe, 9 in 10 are SMEs. They are present in every region and stand for both tradition and innovation in our industry. They are also at the heart of the Single Market. They may be small in scale, but they are big in impact. They may be small in scale, but they are big in impact.

They may be small in scale, but they are big in impact.

Each of them has a story to tell…


Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.