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The Minister for Agriculture, Food and the Marine, Charlie McConalogue T.D., today reminded business-to-business buyers across the agricultural and food supply chain of their legal obligations under the Unfair Trading Practice (UTP) Regulations.
Under these regulations, which the Minister introduced last year, all supply agreements for agri-food products must be in full compliance with the provisions of the UTP Regulations from 28th April 2022.
The Minister said:
“In exactly three months, all supply agreements for agricultural and food products are required to be in full compliance with the provisions of the UTP Regulations. I am, therefore, calling on buyers across the agri-food supply chain to take time to fully understand the legal obligations placed upon them under these Regulations and take appropriate action to ensure compliance. The UTP Enforcement Authority is available to assist buyers with any queries they may have to help them understand their obligations under the UTP Regulations.”
The Minister added:
“I have provided the Enforcement Authority with significant powers to investigate any complaint received and I strongly encourage suppliers to contact the Authority if they feel they have been subjected to any of the unfair trading practices covered in the Regulations. They can be absolutely assured that all contact with the Authority will be handled in strict confidence.”
The UTP Regulations aims to protect farmers, farmers’ organisations and other weaker suppliers in the agricultural and food supply chain against stronger buyers by prohibiting 16 UTPs – 10 of which are prohibited in all circumstances and a further six which are prohibited unless the parties agree clearly and unambiguously beforehand.
The Minister concluded saying:
“The Programme for Government commits to the development of a National Food Ombudsman, and those who know me will also know that this has been a particular priority of mine. This is well advanced and I know that while it is not an office that can set price, it will be an office with real teeth and one that will help shine a light of transparency on the sector.”
Note for editors
The Minister signed S.I. No. 198/2021 - European Union (Unfair Trading Practices in the agricultural and food supply chain) Regulations 2021 (irishstatutebook.ie) on April 28th 2021.
These Regulations gave effect to the provisions of The Unfair Trading Practices (UTP) Directive (Directive (EU) 2019/633 of the European Parliament and of the Council of 17 April 2019 in relation to business-to-business relationships in the agriculture and food supply chain
The Regulations prohibit 16 unfair trading practices (UTPs) – 10 (black) UTPs which are prohibited in all circumstances and a further 6 (grey) UTPs which are prohibited unless the parties agree clearly and unambiguously beforehand. These are outlined in a UTP summary Leaflet DL Final.pdf (utp.gov.ie) and listed below.
10 Black UTPs (prohibited in all circumstances):
1. Payment later than 30 days for perishable agricultural and food products
2. Payment later than 60 days for other agricultural and food products
3. Short-notice cancellations of perishable agricultural and food products
4. Unilateral contract changes by the buyer
5. Payment not related to a specific transaction
6. Risk of loss and deterioration transferred to the supplier
7. Refusal of written confirmation of a supply agreement by the buyer, despite request of the supplier
8. Misuse of trade secrets by the buyer
9. Commercial retaliation by the buyer
10. Transferring the costs of examining customer complaints to the supplier
Grey UTPs (prohibited unless the parties agree clearly and unambiguously beforehand):
1. The buyer returns unsold products to the supplier without paying for those unsold products
2. Payment by the supplier for stocking, display and listing
3. Payment by the supplier for promotion
4. Payment by the supplier for marketing
5. Payment by the supplier for advertising
6. Payment by the supplier for staff of the buyer, fitting out premises
The Regulations afford protection for any supplier of agricultural and food products with a turnover of up to €350 million subject to the supplier’s turnover being lower than the buyer’s turnover within stated categories. The Regulations provide protection for five graduated levels of supplier turnover categories relative to the buyer up to the €350 million turnover limit.
Under the Regulations, a supplier is defined as an agricultural producer or any natural or legal person who sells agricultural and food products. A buyer is defined as any natural or legal person or any public authority who buys agricultural and food products. The Regulations apply only to business-to-business relationships and do not cover sales to consumers.
The UTP Regulations have been applicable since 1st July 2021 to supply agreements established since 28th April 2021 and, from 28th April 2022, all supply agreements, including those that were in place before 28th April 2021, must be in compliance with the Regulations.
The Enforcement Authority has established a dedicated website – http://www.utp.gov.ie/ – which contains useful resource materials and contact details including how suppliers can make a complaint to the Authority.
Programme for Government commitment to establish a National Food Ombudsman
The Programme for Government includes a commitment to:
‘Ensure fairness, equity, and transparency in the food chain by establishing a new authority called the National Food Ombudsman (NFO) to enforce the Unfair Trading Practices Directive. This new authority will enforce EU-wide rules on prohibited unfair trading practices in the food supply chain and will have powers to enforce this Directive, penalising those who breach regulations. The NFO will have a specific role in analysing and reporting on price and market data in Ireland.’
Primary legislation is required to establish the new Office and to provide for functions that go beyond the powers laid down in the UTP Directive. This legislation is being prepared as a priority matter.