EU Sets New Rules on Unfair Business Practices in Ag and Food Supply Chains

EU member states should prohibit certain practices, including late payment, cancellation of orders for perishables on short notice, unilateral changes to certain terms of supply agreements, payments not related to the sale of the agricultural or food products and acts of commercial retaliation, among other things. The rules apply to situations where the buyer committing the act is larger than the supplier, as defined in size categories laid out in the directive, or the supplier that commits the act is very large. The directive sets a mechanism for submitting complaints, and provides that member states have investigatory powers and may impose fines and penalties for unfair trading practices under the directive. The new rules apply not only to suppliers and buyers inside the EU, but also to non-EU buyers and suppliers doing business in the EU.