The Directive on Unfair Trading Practices in the Agri-Food Supply Chain: Regulatory Ambitions and Legal Instruments

Abstract

The Directive on Unfair Trading Practices in the Agri-food Supply Chain is characterized by its objective to increase agricultural producers’ income by redistributing the gains from trade along the supply chain. In this article, arguments are advanced that make it doubtful whether this goal can be achieved: the Directive’s restrictions will (at best) only slightly increase the suppliers’ relative bargaining power. Neither the attempt to limit the Directive’s scope to cases of unequal bargaining power nor the ban of only those practices that are regarded as particularly “egregious” will ensure that the Directive’s restrictions do not also preclude efficiency-enhancing practices. Nonetheless, given the legislature’s wide discretionary power, the Directive could legally be adopted on the basis of Article 43(2) TFEU. While the Directive’s focus is entirely on public enforcement, there are sound reasons to believe that the Directive assigns implicit rights to those parties that are within the Directive’s protective scope and that are (potentially) aggrieved by infringements. The consequences of the incorporation of prohibited contract terms are analysed and potential legal bases for private rights of action are discussed.

Keywords: Directive (EU) 2019/633, European Union, Common Agricultural Policy, Unfair Trading Practices, Agri-food Supply Chain, Distribution, Retailing, Buyer Power, Contracts

JEL Classification: K12, L14, Q18