Unfair Trade Practices in Business-to-Business Relationships in the Agriculture and Food Supply Chain

The aim of the Agriculture and Food Supply Chain Law on Unfair Trade Practices is provide better protection for small and medium-sized suppliers against larger buyers.

Some commercial practices listed in the law are still prohibited (black list).

Other market practices are prohibited unless there is clear and unambiguous agreement between the supplier and buyer (grey list).

When Does this Law Protect You?

The main objective of the law is to protect small-scale producers against major players in the industry, such as supermarkets and agribusiness giants. This law strengthens the bargaining power of small producers and suppliers.

The scope of protection for all small suppliers is very wide-ranging, as decided by the Belgian legislature. This protection also extends to feed suppliers, and includes both perishable and non-perishable product manufacturers..

The law protects producers and suppliers, regardless of whether they are based in the European Union.

In order not to give even more bargaining power to the big players, the Belgian legislator has chosen to protect only those suppliers whose annual turnover is less than 350 million euros.

However, in order to protect all particularly vulnerable farmers, an exception to this rule has been made. Recognised producer organisations are protected even if their turnover exceeds 350 million euros.

Which Market Practices Are Still Prohibited (Black List)?

The following practices are still prohibited:

• The buyer paying the supplier late (more than 30 days).
  A distinction is made between two situations:
  • The supply agreement provides for the delivery of products on a regular basis. In this case, the maximum payment period is thirty days after the expiration of the agreed delivery period, which cannot exceed one month, during which the deliveries were made Alternatively, the payment can be made within thirty days after the date when the amount to be paid for this delivery period is fixed, whichever is later.
  • The supply agreement does not provide for the delivery of products on a regular basis. In this case, the maximum payment period is thirty days after the date of delivery or thirty days after the date on which the amount to be paid is fixed, whichever is later.
• The purchaser cancelling orders at such short notice that the supplier can no longer find an alternative for marketing or using the ordered products.
• The buyer unilaterally changing the terms of a supply agreement.
• The buyer demanding payments from the supplier that are not related to the sale of the products, such as requesting payments to fund the opening of a new branch.
• The purchaser asking the supplier to pay for the loss or damage of agricultural or food products after ownership has been transferred to the purchaser, when such loss or damage is not attributable to the supplier.
• The buyer refusing to confirm the terms of a supply agreement in writing, despite a request from the supplier.
• The buyer unlawfully obtaining, using or disclosing trade secrets.
• The buyer threatening or taking retaliatory commercial action if the supplier exercises his contractual or legal rights. 
• The buyer claiming compensation from the supplier for the cost of investigating customer complaints in connection with the sale of the supplier's products, despite there being no negligence or fault by the supplier. 

Which Practices Are Prohibited Unless there Is a Clear and Unambiguous Agreement (Grey List)?

The following practices are prohibited unless they are clearly and unambiguously accepted in the agreement:

• The buyer returning unsold agricultural and food products to the supplier without payment.
• Requiring the supplier to pay for storing, displaying, referencing, or making their agricultural and food products available in the marketplace.
• The buyer asking the supplier to bear all or part of the costs of any discounts on products sold by the buyer in connection with promotional activities.
• The buyer asking the supplier to pay for the buyer's advertising or marketing of the agricultural and food products.
• The buyer making the supplier pay for the staff to set up the premises used for selling the supplier's products.

What Is the Impact of the Law on Existing and Future Supply Agreements?

The law came into force on 25 December 2021, and applies to new contracts and supply agreements from that date forward.

Supply agreements made before the law was published must be in compliance with it by 15 December 2022.

Penalties and Filing a Complaint

If buyers fail to comply with the rules, suppliers of agricultural or food products or the representing producer organisations can file a complaint with the Economic Inspection.

How to File a Complaint?

To file a complaint with the Economic Inspection, you can use the complaint form.

Download the form (DOCX, 48.49 KB)

If the complaint has been fully and validly filed, the Economic Inspection will respond within sixty days of receipt of the complaint to inform you of how it will be addressed. If necessary, the Economic Inspection can conduct an investigation, and issue a warning or a report in case of infringement. A report may result in a settlement procedure, administrative proceedings or criminal prosecution. The competent ministers or the Director General of the Economic Inspection can also initiate an action for injunction.

Contractual clauses containing unfair market practices between a buyer and a supplier are prohibited and considered void. The contract remains binding on the parties if it can remain in force without the prohibited contractual clause. The nullity of the clause must be requested before the civil courts. The supplier may also initiate legal action in the civil courts.

Confidentiality

At the request of the complainant, the Economic Inspection  of the FPS Economy can take the necessary measures to protect the identity of the complainant and any other information that, if disclosed, could harm the interests of the complainant or his suppliers.

In order to benefit from this protection, you must explicitly request it and specify the information or documents for which you require additional protection. Should you require further information on this subject, please contact the B2B unit of the Economic Inspection

• by email at
  utp.agrifoodchain@economie.fgov.be
  
  or
   
• by post to
  
  FPS Economy
  DG Economic Inspection – B2B Unit
  Boulevard du Roi Albert II 16
  1000 Brussels, Belgium