The transitional period for the full implementation of the Law on the Prohibition of Unfair Trading Practices in the food supply chain expires tomorrow, March 31, by which all contracts between traders, purchasers, and processors must be aligned with this law, the Ministry of Agriculture announced on Friday.
The Law on the Prohibition of Unfair Trading Practices in the food supply chain came into force on December 7, 2017, and the transitional period for its full implementation expires tomorrow. The law prescribes a system for ensuring and protecting fair trading relationships, defines unfair trading practices, and measures to prevent their imposition, as well as the tasks and procedures for its enforcement bodies.
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A total of 24 unfair practices have been established for traders, and 10 for purchasers or processors (some are the same for both) that traders and purchasers charged to producers/suppliers to purchase their products for processing or to place them on store shelves.
Protection of domestic consumers
On that list are: conditioning the conclusion of contracts on compensations, fees for investing in new stores, for market research, for celebrating anniversaries of traders and processors, obligations for products owned by purchasers or traders (fees for waste, damage, and breakage of products, for theft of products from shelves, selling below the purchase price, unilateral termination or modification of contracts, etc.), the Ministry of Agriculture reminds.
They also remind that the law was initiated to protect domestic producers from unfair treatment by traders/purchasers, to establish transparent and fair relationships between producers and traders/purchasers, and to regulate the market and sanction unfair trading practices in the food supply chain.
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They also emphasize that the law does not limit the fundamental interests of producers and traders/purchasers, but establishes a clear framework for accountability in the execution of measurable services that have been charged.
– We expect that the Law will contribute to better cooperation among business partners, without jeopardizing anyone’s business and development, says the Ministry of Agriculture in a statement.
They also remind of the penalties for unfair practices – for legal entities, a maximum of 5 million kuna, and 2.5 million for a natural person who, for example, sells a product at a price lower than the purchase price in the purchasing chain of that product. For other serious violations, the maximum penalty will be 3.5 million kuna, and for minor violations, one million kuna.
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A trader with significant negotiating power is considered one whose total annual income exceeds 100 million kuna, including related companies, while the negotiating power of purchasers and processors refers to those whose total annual income exceeds 50 million kuna.
Equalized all relationships in the chain
– The law has been in preparation for a long time and has been discussed at all levels, including traders, suppliers, and producers. Such practice has not accompanied any previous law in the Republic of Croatia, and it received support from all political options in the Parliament. We have carefully considered the deadlines and left everyone enough time to adapt. Among all stakeholders in the food supply chain, I expect quality cooperation that will not jeopardize anyone’s business and development, said Minister of Agriculture Tomislav Tolušić.
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He stated that with the new law, no one has been deprived, but all relationships in the food supply chain have finally been equalized.
The Minister of Agriculture also called on everyone to report unfair practices so that the Competition Protection Agency can react promptly and, if necessary, initiate proceedings for imposing penalties on those who violate the law.
