Last update 11.10.2023
Certain major operators in the agricultural and food supply chain who have considerable bargaining power over their suppliers could be tempted to abuse their position to impose unfair commercial practices.
In order to provide better protection for farmers and small business operators, the law:
- prohibits certain unfair commercial practices between suppliers and buyers of agricultural and food products; and
- lists certain practices that may be authorised only with clear prior approval.
If you are a supplier who believes to have been the victim of an unfair commercial practice prohibited by law, you can lodge a complaint with the Competition Authority.
In the event of an infringement, the Competition Authority can impose fines ranging from EUR 251 to EUR 120,000 on the offender and order them to put an end to the illegal practice.
Who is concerned
The protection of farmers and small business operators applies to transactions between a supplier and a buyer, provided that at least one of the 2 is established in Luxembourg.
The following transactions are protected by the law:
- sales of agricultural and food products; and
- certain services ancillary to the sale of these products.
As a supplier, you benefit from legal protection against unfair practices by your buyer if your respective commercial powers are unequal. The existence of such an economic imbalance is assessed on the basis of the relative difference between your respective sales figures (see table below).
As an agricultural producer or any other natural or legal person, producer organisation, supplier organisation or association of such bodies selling agricultural and food products, you are protected against unfair practices by more powerful buyers.
- agri-food processors;
- producer organisations;
- cooperatives; etc.
As a natural or legal person, a public body in the EU or any group of natural or legal persons falling into this category, who buys agricultural and food products, you are prohibited from using unfair practices listed by law.
- agri-food processors;
- producer organisations;
- public bodies;
Difference in turnover to be taken into account
As a supplier, you are protected against unfair practices by buyers who have a higher turnover than you according to the following sliding scale:
Turnover ≤ EUR 2,000,000
Turnover > EUR 2,000,000
EUR 2,000,000 < Turnover < EUR 10,000,000
Turnover > EUR 10,000,000
EUR 10,000,000 < Turnover < EUR 50,000,000
Turnover > EUR 50,000,000
EUR 50,000,000 < Turnover < EUR 150,000,000
Turnover > EUR 150,000,000
EUR 150,000,000 < Turnover < EUR 350,000,000
Turnover > EUR 350,000,000
The turnover taken into account includes the turnover of any linked or partner enterprise, in accordance with the criteria of Recommendation 2003/361/EC concerning the definition of micro, small and medium-sized enterprises.
If you are a supplier with a turnover in excess of EUR 350 million, you are not protected. You are deemed to have sufficient financial clout to negotiate your commercial terms independently.
On the other hand, if you are a supplier with a turnover not exceeding EUR 350 million and you sell agricultural or food products to a public body, you automatically benefit from the protection offered by the law.
How to proceed
Agricultural and food products concerned
Supplier protection applies only to the supply of agricultural and food products listed in Annex I to the Treaty on the Functioning of the European Union (TFEU), as well as to products not listed in said Annex but which are processed for use in human nutrition using products listed in said Annex.
Examples of products covered by Annex I of the TFEU:
- fruit and vegetables;
- milk; etc.
Examples of products processed using these products:
- dairy products;
- ready-to-eat meals; etc.
In commercial relations between suppliers and buyers of unequal size an power, the law provides for:
- 10 specific commercial practices that are prohibited in all circumstances (black list); and
- 6 practices that are in principle prohibited, unless they have been agreed upon in advance in clear and unambiguous terms (grey list).
As of 1 June 2022, all existing contracts between suppliers and buyers must comply with the law.
Black list: 10 practices prohibited in all circumstances
- payment after 30 days for perishable goods;
- payment after 60 days for non-perishable goods;
- short-term cancellation of orders for perishable goods;
- unilateral modification of the supply agreement by the buyer;
- transferring the cost of investigating customer complaints to the supplier;
- payments not related to the sale of products required by the buyer from the supplier;
- refusal, by the buyer, to confirm in writing the terms of a supply agreement, despite the supplier's request;
- unlawful acquisition, use or disclosure of the supplier's trade secrets;
- commercial retaliation or threat of retaliation by the buyer;
- transfer of the risk of loss and/or deterioration of the products borne by the supplier, without the loss or deterioration resulting from their negligence or fault.
Grey list: 6 practices prohibited without clear prior agreement
- return of unsold products to the supplier without payment;
- payment requested from the supplier for advertising made by the buyer;
- payment requested from the supplier for the buyer's promotional activities;
- payment requested from the supplier for the marketing of the products by the buyer;
- payment requested from the supplier for the remuneration of the staff responsible for fitting out the premises used to sell the products;
- payment requested from the supplier for storing, displaying or listing products or for making them available on the market.
Lodging a complaint
Suppliers in the agricultural or food sector who believe that they have been the victim of a prohibited unfair commercial practice may lodge a complaint with the Competition Authority. In order to do so, they must:
- fill in the complaint form against commercial practices in the agricultural and food supply chain (see under 'Online services and forms'); and
- email the form to email@example.com.
In order to protect the complainant against possible reprisals, the Competition Authority may preserve the complainant's anonymity and take all necessary measures to protect any other information whose disclosure would be prejudicial to the complainant.
Forms / Online services
Plainte contre des pratiques commerciales déloyales au sein de la chaîne d’approvisionnement agricole et alimentaire
Démarche en ligne
Soumission d’une plainte contre des pratiques commerciales déloyales au sein de la chaîne d’approvisionnement agricole et alimentaire