Establishing a standard of protection against unfair trading practices in agribusiness

The Directive (EU) 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain required Member States to transpose the provisions of this Directive into national law by 1 May 2021, with effect from 1 November 2021.

Already one step into the infringement procedure, Romania adopted the law no. 81 of 11 April 2022 which was published in the Official Gazette of Romania on 12 April 2022 (the Law).

Its core aim is to prevent unfair trading practices occurring due to differences in bargaining power, which correspond to the economic dependence of the supplier on the buyer.

Key limitations to strengthening the bargaining power of farmers and small and medium-sized enterprises in the food supply chain:

  • The first category includes the “blacklist” of 25 unfair commercial practices prohibited to the buyer in all circumstances, which includes various practices such as late payments; short notice cancellation of orders; unilateral amendment of contract terms relating to, among others, delivery calendar or volumes; threating with commercial retaliation against the supplier; return of unsold agricultural or food products; imposing fees on the supplier that would oblige it to artificially increase the price etc.
  • The second category includes the “grey list” of commercial practices which are also prohibited to the buyer, unless the supplier and the buyer have agreed on this basis in clear and unambiguous terms, the burden of proof in this situation being on the buyer.

The Law applies to commercial contracts concluded after the date of its entry into force. Commercial contracts concluded before this date must be brought in line with the Law by 31 December 2022.

The Competition Council is the authority competent to detect and punish unfair commercial practices in the agricultural and food supply chain. Fines for the breach of Law vary from Lei 250,000 (approximately EUR 50,000) to up to 1% of the total turnover generated by the infringer in the previous financial year in case of repeated unfair practices. In addition, the buyer can be obliged to pay three times the value of the damages caused to the supplier.

 

*This ePublication is provided by Radu Taracila Padurari Retevoescu SCA and is for information purposes only. It does not constitute legal advice or an offer for legal services. The distribution of this document does not create an attorney−client relationship. If you require advice on any of the matters raised in this document, please call your usual contact at Radu Taracila Padurari Retevoescu SCA at +40 31 405 7777.

This site is registered on wpml.org as a development site.