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February 08 2018
The Competition Protection Agency recently published the results of a survey on unfair trading practices in the food supply chain, which the agency conducted among suppliers of food products, including producers, purchasers, processing companies and intermediaries. Despite the small number of responses, the agency obtained some useful information on the functioning of the Slovenian food market.
Unfair trading practices in the food supply chain are regulated in the Agriculture Act(1) and are defined as practices imposed by one contracting party with significant market power (evident from the volume or value of sales) on another party contrary to good business practices – in particular:
The agency is supervising the implementation of the respective provision of the act.
The aims of the survey were to:
The survey was sent to 559 suppliers of food products, but only 61 responded. This could be because they were afraid that responding would lead to a loss of business or, on the contrary, because they do not see this problem as a pressing issue. Still, the agency concluded that the market response signifies that there are unfair trading practices in the food supply chain.
The unfair practice most commonly indicated by respondents was the failure to comply with prescribed payment deadlines, followed by the imposition of additional payments. The agency described as unfair retailers' practice of charging costs to suppliers which are not reflected in the service performed or from which the supplier does not gain a mutual benefit. These practices include, among others:
The food supply chain affects all consumers on a daily basis. Before a good reaches the consumer, a number of market participants add to its value and influence the final price paid by the consumer. Therefore, special attention should be paid to unfair trading practices by all market participants.
In addition, the agency called for better and more transparent regulation of the unfair trading practices in the act. In particular, 'significant market power' and 'imposition' should be defined more precisely, which would help the agency to establish certain practices as unfair and take appropriate action against violators.
For further information on this topic please contact Urša Kranjc at Schoenherr Slovenia by telephone (+386 1 200 09 80) or email (email@example.com). The Schoenherr website can be accessed at www.schoenherr.eu.
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