Unfair commercial practices in the agricultural chain: existing contracts now also protected
The Dutch Act regarding unfair commercial practices in the agricultural and food supply chains stipulates what unfair commercial practices between suppliers and buyers are prohibited, and what practices are allowed if these had been agreed upon in advance. All contracts (both old and new ones) must comply with the law starting 15 April 2022.
The positions of farmers, growers, and fishermen vis-à-vis major buyers have been strengthened as a result of the law. The new law offers food suppliers protection against various kinds of unfair practices such as late delivery and last-minute cancellation of orders.
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)
Report unfair commercial practices
Food suppliers can file reports about abuses with ACM. ACM realizes that filing a report may damage the relationship between a supplier and buyer. That is why filing a report can also be done anonymously. Trade associations, associations, or groups of suppliers can file reports on behalf of their members, too. The benefit thereof is that small suppliers are stronger together, and it is another possible way to file reports anonymously. Without reports, it is harder for ACM to take action against unfair commercial practices. In addition, ACM can also launch ex-officio investigations in the case of suspicions. Violations of the prohibition on unfair commercial practices can be penalized by imposing fines or orders subject to periodic penalty payments.
New campaign
The Dutch Act regarding unfair commercial practices in the agricultural and food supply chains went into effect on 1 November 2021. Contracts that have been concluded since must comply with the law. From 15 April 2022, old contracts, too, must have been adjusted, and must be in compliance with the law. Over the next few weeks, ACM will continue to raise awareness of the law among market participants. For example, various presentations will be given at trade associations and product associations. In addition, online and offline media will be used to remind suppliers of the law.
The Dutch Foundation for Consumer Complaints Boards
Suppliers can also file reports with the complaints board regarding unfair commercial practices in the agricultural and food supply chains (which is one of the many complaints boards that are part of the Dutch Foundation for Consumer Complaints Boards). This complaints board in particular adjudicates disputes between suppliers and buyers. It issues binding decisions on who is right, and, in addition, can award damages. The Dutch Foundation for Consumer Complaints Boards is thus an easy way for food suppliers to reach a solution with regard to unfair commercial practices. 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.
ACM and the agricultural sector
ACM keeps a close watch on agricultural markets in order to ensure that they work well for people and businesses, now and in the future. From November 2021, farmers, growers, fishermen, and many food processors will be able to file reports about unfair commercial practices with ACM. In addition, ACM publishes the price monitor for the agricultural sector. This monitor provides a good overview of how markets work and what obstacles to more sustainable production exist. To stimulate sustainability further, including in the agricultural sector, ACM drew up the guidelines regarding sustainability agreements. In addition, ACM also drew up guidelines on sustainability claims, with the aim of protecting consumers against misleading claims with regard to sustainability and promoting fair competition in this area.