Unfair Trading Practices (UTPs) in The Food Supply Chain
09 April 2025Solution to Strengthen Farmers’ Position?
In April 2024 the European Commission published its implementation report on the Unfair Trading Practices Directive (EU 2019/633), outlining the transposition of the Directive in 27 member states. The national implementations of the Directive show differences among member states, having many stricter provisions that go beyond the objective of the Directive in terms of protecting farmers. On the contrary these provisions strengthen the position of large suppliers with significant market power even further.
Amidst farmers’ wide-spread protests in 2024, the Commission came up in December 2024 with two legislative proposals on targeted amendments to the cross-border enforcement of UTPs, as well as to cross-border enforcement of UTPs in order to strengthen farmers’ position in the food supply chain.
The retail and wholesale sector has hardly any direct contractual relationship with the farmers. There are only a few products that can be sourced directly from farmers without any further steps of packaging or processing.
To the contrary most agricultural products are processed. Retailers and wholesalers cannot source these products directly with farmers, but they need to deal with processors and industry such as in meat and dairy trade. At the same time there are some local collaboration projects to help the farmers’ transition to more sustainable agricultural practices. Pricing of agricultural products depends on numerous factors such as intermediaries, brand manufacturers, global demand and supply, hence fluctuating world prices. There are also other restraints such as Territorial Supply Constraints that restrict sourcing from countries other than by manufacturer designated ones, which have major impact on the pricing and earnings in the food supply chain.
Further strengthening of UTP rules will not automatically lead to strengthening the position of farmers. As noted in the final report of the Strategic Dialogue on the Future of EU Agriculture, further collaboration is necessary among different stakeholders, be it farmers, processors, industry, retail, wholesale and end-consumers to find a solution on how to strengthen farmers’ position along the food supply chain.
Read our detailed position paper: