In November 2019, the Department of Agriculture, Food and the Marine sought submissions to a public consultation on the transposition of Directive (EU) 2019/633 of the European Parliament and of the Council of 17 April 2019 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain. The consultation closed to submissions on 13 December 2019.
652 submissions were received:
- 16 submissions were from organizations and public representative(s),
- 636 submissions were received from individuals, of which,
• one identical submission was submitted by 612 individuals
• one identical submission was submitted by 24 individuals
The following provides a thematic overview of the submissions received through the Public Consultation and is intended to broadly summarise the issues raised. The document does not refer to every individual point made in the submissions but has categorised all issues raised into the following broad headings:
• Matters concerning extending the scope of Directive.
• Issues falling outside the remit of the Directive.
• Issues already addressed by the Directive.
• Status of existing Irish law and pace of transposition.
• Designation of Enforcement Authority.
• Other including operational issues for the Enforcement Authority.
These points are elaborated below.
1. Extend scope of the Directive
Several submissions requested that the list of prohibited practices in the Directive be amended in some way, for example:
• the list of UTPs to be extended or amended (specific details not provided in all cases)
• changes in some of the time periods to take account of certain products
• include suppliers with an annual turnover above €350m
• broaden the range of products falling under the scope of the Directive
Any measure, which would extend beyond the ‘minimum harmonisation’ requirements of the Directive as it stands would require primary legislation to be enacted in Irish law. The current consultation launched in April 2021 gives an opportunity to provide more precise details on some of the points referred to above.
2. Issues falling outside the remit of the Directive
Several submissions highlight the issue of ‘below cost selling’. The UTP Directive does not deal with issues of price setting or negotiation, therefore this issue does not fall into its scope.
Other submissions submitted that the Enforcement Authority provide a market monitoring function, a role in advising on commercial and economic development of the sector and overseeing implementation of future legislation relating to the agriculture sector in particular. This is not a role foreseen in the Directive for the Enforcement Authority. However, it is noted that a commitment in the Programme for Government includes a reference to a National Food Ombudsman having a role in analysing and reporting on pricing and market data.
3. Issues already addressed by the Directive
Some submissions highlight issues that the Directive already addresses. For example:
‘Unilateral change of price by the buyer’ to be prohibited: this issue is addressed by Article 3 of the Directive pertaining to unilateral change of a supply agreement by a buyer.
Mediation service: this is addressed in Article 7 of the Directive which provides for the use of effective and independent alternative dispute resolution and for such a service to be promoted.
Imposition of penalties: Powers already provided for the Enforcement Authority in the Directive including imposition of penalties i.e. Article 6 (e) of the Directive includes the power to impose, or initiate proceedings for the imposition of, fines and other equally effective penalties and interim measures on the author of the infringement, in accordance with national rules and procedure.
4. Status of existing Irish law and pace of transposition
Certain submissions argued that the Directive be transposed earlier than May 2021. While it is desirable to transpose the Directive as soon as practicable, the legal aspects of the Programme for Government commitment referring to the UTP had to be considered.
Certain aspects of S.I. No. 35/2016 are mentioned in several submissions including possible overlap and/or gaps between the Directive and SI No. 35 of 2016, the need to distinguish between what is covered by both sets of legislation and the need to ensure protection of suppliers with turnover in excess of €350m. The Grocery Goods Undertakings Regulations fall under the remit of the Department of Enterprise, Trade and Employment (DETE). This Department has engaged with the DETE in the context of the transposition. The legal rules in the UTP Directive must be implemented by national law.
6. Designation of Enforcement Authority.
Submissions from stakeholders / interest groups fall within the following preferences for the enforcement authority:
• The Competition and Consumer Protection Commission
• An Ombudsman type model
• An independent sectoral regulator
7. Other issues raised including reference to existing arrangements between suppliers and buyers and the Enforcement Authority
Submissions received included reference to the following:
Existing arrangements between suppliers and buyers including access to farmer information and payment deductions as well as quality/specification requirements and issues arising from cancellation of contract
The need for clarification on the role of cooperatives as buyers
That the protection of farmers in the supplier/processor/retailer relationships must take priority over all others when resources are stretched
That the burden of proof should be on the larger entity to prove that a practice or behaviour is not unlawful
That consideration should be given to the impact of the introduction of the legislation on small retailers
That the ability to freely negotiate sales transactions including prices should not be impacted by the legislation aside from those practices which are unfair
That the Enforcement Authority should be funded by the State and not through levies
The role of the Enforcement Authority
That there should be an opportunity to review implementation and add UTPs that are not covered in the current Directive
That consideration be given to the implications on suppliers arising from the exit of the UK from the EU.