The positions of farmers, growers, and fishermen vis-à-vis major buyers have been strengthened. That is the result of the new Dutch Act regarding unfair commercial practices in the agricultural and food supply chain. This new law offers food suppliers protection against various unfair practices such as late delivery and last-minute cancellation of orders. Violations of the prohibition of these practices can be penalized with fines or orders subject to periodic penalty payments. Starting November 1, the Netherlands Authority for Consumers and Markets (ACM) enforces compliance with these rules. If buyers do not comply with the rules, food suppliers will have the opportunity to file reports with ACM (in Dutch), also anonymously.
Food suppliers usually deal with major buyers, such as traders and supermarkets, which are able to set and change their purchase conditions unilaterally. Smaller food suppliers do not always have the confidence to confront their buyers with such situations because of the unequal balance of power. As a consequence, they may be harmed. The law now prohibits specific commercial practices employed by buyers including:
- Late payments (after 30 days for perishable products, and after 60 days for non-perishable products)
- Last-minute cancellations
- Changing arrangements unilaterally
- Retaliatory acts (for example, no special deals, no communications)
Several other practices are also prohibited, unless they have been agreed upon in writing. Think of returning unsold products without having to pay, or asking suppliers for reimbursements of the costs for storage, for adding products to the product range, for promotional activities such as marketing, and discounts on the products featured in promotions.
ACM is charged with enforcement of compliance with the act. ‘Food suppliers have the opportunity to file reports if they are dealing with an unfair commercial practice. They can also do so anonymously. ACM will then assess whether the practice is question is a structural practice. If that is the case, ACM can impose a fine on buyers. In the case of incidental disputes, the Dutch Foundation for Consumer Complaints Boards may be contacted’, says Chairman of the Board of ACM Martijn Snoep.
With this act, the Netherlands implements the EU directive that offers suppliers protection against unfair commercial practices. The act applies to farmers, growers, fishermen, and florists, among other professionals, but also to other suppliers of agricultural and food products (meat processors, dairy plants, and wholesalers) that supply retailers such as supermarkets. With a targeted campaign, ACM will inform food suppliers about the option of filing reports.
Starting in January 2022, suppliers can also contact the Dutch Foundation for Consumer Complaints Boards (in Dutch: De Geschillencommissie) for dispute settlement. The Dutch Foundation for Consumer Complaints Boards specifically adjudicates disputes between suppliers and buyers. Please note that the reporting procedure at ACM and the dispute settlement procedure at the Dutch Foundation for Consumer Complaints Boards are two separate procedures and are not connected to each other.