COVID-19 causing spike in unfair trade practices, farmers complain

EU legislators approved a long-waited set of rules to tackle unfair trade practices just a year ago, fixing one of the major backlogs of the entire EU legal framework on foodstuffs. [SHUTTERSTOCK]

Farmers are noticing an increase in the use of unfair trade practices (UTPs) in the wake of the coronavirus pandemic, while the implementation of the EU regulation that should protect them is still in its early stages.

UTPs create imbalances in the food supply chain when large operators can count on more bargaining power with weaker trading partners, such as individual farmers and smallholders.

EU legislators approved a long-waited set of rules to tackle UTPs just a year ago, fixing 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.

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).

However, many national members of the EU farmers organisation COPA-COGECA are reporting a spike in the UTPs since the pandemic started, including downward pressure on prices paid to producers whilst consumer prices remain unchanged, especially for perishable products like fruit and vegetables.

Downstream operators in the food chain are also reportedly applying contractual penalties if the supplier does not deliver the ordered volumes, even when the cause is beyond their direct control.

Unilateral removal of fresh product lines from shops and the consequent refusal to accept deliveries of such products is another unfair practice communicated by farmers to COPA-COGECA, as well as unilateral changes to contracts, invoking ‘force majeure’ circumstances.

Misleading cases of country of origin labelling are included in the list of UTPs and before Easter, some cases were reported of erroneous labelling of lamb as having originated in the EU, when in reality came from New Zealand.

Lastly, retailers seem to use strategies or promotional campaigns aimed at disrupting the product segmentation, for instance when free range-eggs and cage/barn eggs are being sold at similar consumer prices.

These and other practices clearly deviate from sound and ethical commercial transactions, said COPA-COGECA, which also called on the European Commission to push member states to properly and swiftly transpose and implement the EU Directive on combating UTPs along the entire agri-food supply chain.

EURACTIV discussed the current situation with socialist MEP Paolo De Castro, who had been instrumental in making the bloc’s UTPs directive happen by negotiating with EU ministers and Europe’s powerful retail and wholesale lobbies.

“I’m getting reports of this situation too,” De Castro confirmed. He said the main problem is that the latest rise in UTPs has to be managed by the member states themselves, according to the old rules, as the implementation of the directive is at an early stage.

In an earlier interview, immediately after the directive was approved, De Castro stressed that the true challenge for the implementation would be time-related, expecting national parliaments to transpose the directive within two years.

“In procedural terms, only Spain has implemented the directive, thanks to the initiative of the agriculture minister Luis Planas who managed to transpose the directive with a decree-law,” the Italian MEP told EURACTIV this week.

“In Italy, we approved the directive in the Council of ministers but then the COVID-19 crisis broke out slowing down the process,” he said, adding that, however, Italy’s agriculture ministry has set up a free-hotline for farmers to immediately report cases of UTPs.

“Particularly in this period of crises, there could be situations in which who’s stronger in the food chain set the conditions to the weaker,” he concluded.

Battle over unfair trade practices ends, its champion rejoices

On Tuesday (12 March), the European Parliament approved long-awaited legislation on unfair trade practices (UTPs). EURACTIV.com spoke with the lawmaker who shepherded the new rules over the line.

[Edited by Zoran Radosavljevic]

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