Slovakia leads push to strengthen EU unfair trading practices directive to stop “major threat” of large food entities
Slovakia is leading a push to harden “unsatisfactory” EU rules on unfair trading practices by “dominant entities” like supermarkets. It argues that improper practices by big multinationals weaken farmers, food processors, and producers’ bargaining power.
During yesterday’s EU Agriculture and Fisheries Council meeting, Slovakia’s agriculture minister, Richard Takáč, said it was essential to “bolster the protection” of weaker economic players in the food chain. Bulgaria, Croatia, Hungary, Lithuania, Romania, and Slovenia are supporting the call, urging the European Commission (EC) to lead consultations with farmers and other stakeholders so action can be taken.
“The current situation where thousands of farms are subject to dominant economic players is unacceptable to us. Unfair trade practices are not just a problem; they are a major threat. They are a major threat to farmers, regional producers, and food security in the whole of the union. The fact that many producers and farmers are forced to sell their products below production costs shows how much of an imbalance there is on the market,” he said.
Takáč stressed that figures show between €30 billion (US$31.2 billion) to €40 billion (US$41.7 billion) annually is lost due to bad practices by large food entities.
“Those funds could be used for modernization, innovation on farms, improving working conditions for workers, and developing the rural environment. But that’s not happening because of these opaque arrangements and unfair division of margins,” he told the council.
“Black” and “grey” practices
He wants the EC to improve and extend the scope of its unfair trading directive, moving to a more regulatory approach.
“We have two objectives. First, in Slovakia, we need to have ‘selling things below production cost’ as an unfair trading practice. That would allow more balance in the food chain and a better distribution of profits. We also need to move from a directive to a regulation to have a real impact. We need binding rules that allow people not to interpret things differently depending on which member state they’re selling in,” Takáč said.
The EU directive on unfair practices was adopted in April 2019, with EU countries required to make it national law by May 2021. The law distinguishes between ‘black’ and ‘grey' practices, with black (there are ten practices) prohibited regardless of the circumstances and grey (there are six practices) allowed if the supplier or buyer agrees to them beforehand “in an unambiguous manner.”
The bloc of countries hopes a hardened approach will give farmers a stronger bargaining position with price makers like supermarkets and large food corporations. They also want to protect consumers from price fixing between supermarkets, which they say distorts prices internationally.
News about a push to improve the rules first emerged in a memo circulated by Slovakia and the other nations ahead of the council meeting, in which they outlined their concerns.
The note says the EC should focus on the prohibition of unfair trading practices, as this will ensure a fair division of profit among all those in the food supply chain.
Price fixing and the market dominance of large supermarkets have long been concerns globally. In August 2024, the Norwegian Competition Authority (NCA) fined three top grocery chains 4.9 billion NOK (US$466 million) after they illegally shared extensive price information, restricting fair competition. Meanwhile, the Australian coalition party said last July that supermarket chains could be broken up to stop leading players from abusing their market share power.
