Fevia launches Fair Trade Relations Guide

Retailers threatening to take products off the shelves, extended payment terms, pressure during negotiations... These are all unfair market practices that food companies can face. In a new Guide, Fevia now gives its members insight into how to protect themselves against them.

Guide for protection against unfair market practices

In the new Fair Trade Relations Guide, Fevia describes what legal means can protect against unfair market practices. The focus is initially on the UTP Act (for small and medium-sized companies with an annual consolidated turnover of up to 350 million euro). Later, the Guide will be supplemented with info on legal protection for large companies.

What is the UTP Act?

The UTP Act was introduced in December 2021 to protect companies from abuse by large buyers. It aims to rebalance the skewed power situation between suppliers and their customers. For this purpose, a list of 16 unfair market practices was drawn up that food companies can fall back on in commercial negotiations between supplier and buyer. That there is now a specific legal framework provides additional protection and facilitates dialogue towards balanced commercial relations.

Black and grey list

The UTP Act divides unfair market practices into a black and a grey list. Blacklisted practices are always prohibited, even if they were mutually agreed upon. For example, consider a payment period by the buyer of 45 days (instead of 30 days). Grey-listed practices are also prohibited, but not if the buyer and supplier mutually agree on them and they are clearly stated in the supply contract. For example, if the buyer asks the supplier to contribute to the cost of a promo, the arrangements for this must be in writing and the suppliers must be given a quote for the associated costs.

What are unfair market practices?

A market practice is considered unfair if there is excessive use of bargaining power. The pressure involved then leads to - vulnerable - food companies accepting certain terms that they would not accept without pressure.

Perhaps the best known - and current - unfair market practice in this sense is when a retailer applies pressure by taking products off the shelves - or putting them in a poorly visible place - if the manufacturer does not agree to the proposed rates. For this situation too, the Signpost offers questions and answers that can be useful during negotiations.