Unfair trading practices in the food supply chain : a literature review on methodologies, impacts and regulatory aspects

This report constitutes a compilation of the principal issues raised by the speakers at the workshop jointly organised by the Directorate-General for Agriculture and Rural Development and Joint Research Centre on 'Unfair trading practices in the food supply chain' held in Brussels between 17-18 July 2017. The retail and processing segments of food supply chains have witnessed an increasing concentration across Member States (MS) and at global level. A direct consequence of these changes is the bargaining power imbalances in trade relations between the actors in the chain, potentially leading to unfair trade practices (UTPs). UTPs may occur in particular when weak parties have no real alternative to the commercial relation at hand; when one of the parties depends on its counterparts due to factors such as technology and know-how; when one of the parties can exploit informational advantages to the detriment of the other party; in case of incomplete contracts, which leaves room for strategic behaviour during the course of the negotiation, execution and finalisation of a contractual relationship. The European Commission started to discuss UTPs as a potential problem in the food supply chain already in 2009. In 2013, the European Commission adopted the European Retail Action Plan and a Green Paper on unfair trading practices in the business-to-business (B2B) food and non-food supply chain . The Green Paper makes an initial assessment of the problems posed by UTPs in B2B relationships along the food and non-food supply chain, including the issue of efficient enforcement of existing national rules and the resulting impact on the single market.