Tomorrow Wednesday (24/10), the European Commission will vote on a proposal aimed at resolving unfair trading methods. The proposal will contribute to a fairer, more transparent and sustainable food chain. Work on the proposal has been prompted by increasingly good “business practice” in recent years, often with a focus on measures that can strengthen the competitiveness of small and medium-sized agricultural and food companies in the supply chain.
What are unfair trading methods?
By unfair trading practices or unfair trading practices (UTP), the European Commission refers to actions that deviate from good business practice and fair treatment. Some of the most common violations that the proposal seeks to ban are:
- Late payments for fresh produce
- Last minute order cancellations
- Unilateral or retroactive changes in the contracts
IFOAM EU Position
IFOAM EU - the European umbrella organization for organic food and agriculture - says in a press release that they see the proposal as a positive first step in ensuring fair prices for producers.
- One of the main principles in the organic sector is justice and the eco-movement strives for farmers to receive fair compensation for their products. Power should be more evenly distributed without the influence of mergers and skewed balance of power in the food chain, says Eduaordo Cuoco from IFOAM EU.
IFOAM, however, expresses concern that the current proposal makes a difference to different actors based on their size and that it thus does not cover all actors in the food chain. In addition, IFOAM argues that the proposal should cover several different types of unfair business practices such as information asymmetry - omitting necessary information from another actor.
Unfair trading conditions in Sweden
According to the Ministry of Trade and Industry's factual memorandum, the players in the Swedish food chain have Directive on unfair trade practices between food chain companies, did not request legislative action against UTP. On the other hand, according to the same memorandum, the primary production stage and the processing stage have expressed that the problems with UTP are so serious that a common EU legislation is desirable.
- I am convinced that a more fair and transparent food chain contributes to better relationships and collaboration, creates trust and security and in the long run improves the conditions for product development and innovation, says Charlotte Bladh André, CEO of Organic Sweden.
IFOAM EU is reviewing the European Commission's work with a group of NGOs such as Oxfam, the Fair Trade Advocacy Office and Traidcraft to further strengthen the proposal.