Unfair Trading Practices in the Food Chain: Regulating Right?

Abstract

On 12 April 2018, the European Commission published a Proposal for a directive on unfair trading practices in business-to-business relationships in the food supply chain, COM(2018) 173 final (‘UTPD’). Currently, the European Parliament and the Council review the proposal. In this paper, we provide an overview of the issue of Unfair trading practices (‘UTPs’) in the supply chain, the content of the original proposal and its proposed amendments and subsequently analyze the different proposed regulations from a legal perspective. We show that, despite the fact that the proposal certainly pursues noble goals, it has important flaws and shortcomings: (1) it is questionable whether Art. 43 TFEU is a valid choice as a legal basis as the scope of the proposal targets the entire food sector. Arguably it can hence not be adequately based exclusively on the Common Agricultural Policy (‘CAP’) instruments legal basis. (2) UTPs rules are complementary to EU competition law, which may send ripples to the overall structure of EU law. The UTPs mentioned cover situations of unequal bargaining power – the focus is on the bilateral power of balance between market participants, as opposed to competition law rules on abuses of dominance that are geared to address practices that have an effect on the overall market. (3) It is unclear why and on which basis the respective practices were chosen and if this static approach allows for sufficient flexibility to also cover other UTPs that might evolve over time. It is, however, likely that the Proposal lays the foundation for a growing area of EU law, which increasingly regulates practices in B2B relationships.

Keywords: Unfair Trading Practices, B2B, Food Chain, European Union, Internal Market