Fines of 1.2 million euros imposed for unfair trading practices so far

The Law on the Prohibition of Unfair Trading Practices (ZNTP) in the food supply chain has brought about a number of positive changes, but regulations continue to be violated, resulting in fines of 1.2 million euros imposed so far, it was stated on Wednesday at a conference organized by the Agency for the Protection of Market Competition (AZTN) and the Faculty of Law in Osijek.

The Chairwoman of the AZTN Council, Mirta Kapular, stated that the law has brought positive changes in business patterns between buyers and suppliers of food products since its implementation in 2018, greater legal certainty, and the introduction of financial discipline in compliance with prescribed business conditions.

However, she warns that the most common unfair trading practices in Croatia still relate to payment deadlines, specifically payments exceeding 30 days for perishable food products and 60 days for other products, as well as insufficiently defined delivery locations for products.

She mentioned that AZTN has so far issued 28 decisions establishing unfair trading practices in 47 completed administrative procedures.

To date, fines amounting to 1.2 million euros have been imposed for violations of the ZNTP. Only one decision is currently under appeal at the High Administrative Court, while the Administrative Courts have confirmed all our other decisions so far, Kapular said.

She confirmed that the retail chain Studenac was fined 132,000 euros because the Agency identified several unfair trading practices, such as non-compliance with mandatory contractual provisions in determining prices and payment deadlines.

The largest fine imposed so far was against the retail chain Spar, amounting to 172,000 euros, but the purpose of enforcing the law is not only punishment but also education and deterrence from violations, as well as the establishment of fair trading practices that protect participants in the food supply chain, Kapular emphasized.

The Director General of the Croatian Employers’ Association (HUP), Irena Weber, stated that HUP continuously advocates for fair trading practices and market conditions throughout the economy, with as little interventionism as possible and as many market mechanisms as possible.

Employers, Weber says, are aware of the importance of competition rules being corrective and supporting healthy market competition, but it is crucial that they do not block business processes.

Not only in Croatia but also globally, we are witnessing increasing interventionism, which undermines market competition and acts contrary to the best practices of that competition. In recent years, we have witnessed moves that we believe significantly disrupt market competition, especially the Trade Act and Sunday work regulations, which is why we have sought a constitutional review, Weber pointed out.

The President of the Croatian Chamber of Agriculture (HPK), Mladen Jakopović, reminds that the adoption of the ZNTP was prompted by farmers themselves, as it exists in several European countries and contributes to balancing a part of the market that has not been sufficiently regulated so far.

According to him, HPK insists on the adoption of such a directive at the European level to balance the uneven practices in other EU member states, as he believes that many unfair trading practices originate from other countries.

We believe that such a European directive would facilitate the process in food trade, as well as in other agricultural products, Jakopović assessed.

The conference will feature two panel discussions: on the contribution of the Law on the Prohibition of Unfair Trading Practices in the food supply chain and practical examples of unfair trading practices.