Introduction, Scope and Purpose
The Unfair Trade Practices in Agriculture and Food Supply Chain Act (the “Act”) implements EU Directive 2019/633 on unfair trading practices (“UTPs”) in business-to-business relationships in the agricultural and food supply chain. The Act entered into force in the Netherlands on 1 November 2021 after transposition into Dutch law (Promulgation: 15 April 2021). Its objective is to strengthen the bargaining position of farmers and smaller suppliers by prohibiting certain unfair practices by larger buyers (such as supermarkets and other large purchasers) that arise from significant imbalances in commercial bargaining power.
EU Member States were required to transpose Directive 2019/633 into national law by 1 May 2021, with application no later than six months later. The Directive sets minimum harmonised rules on prohibited practices across the EU; Member States may adopt stricter measures but may not provide lower levels of protection than the Directive.
Application and Coverage
The Act applies to commercial relationships where a supplier’s annual turnover is significantly smaller than the buyer’s, based on turnover thresholds set out in Dutch law. The use of turnover thresholds aims to identify relationships with a potential imbalance of bargaining power consistent with the EU Directive. Suppliers and buyers established both inside and outside the EU are potentially subject to the Act when trading agri-food products that fall within the scope of the Directive’s Annex I (agricultural products including processed foodstuffs).
If a supplier and buyer are equivalent in terms of turnover category, or if the supplier’s turnover exceeds the buyer’s, the Act does not apply.
Black List of Prohibited Practices
The Act prohibits specific commercial practices by the buyer towards the supplier, irrespective of any contractual agreement. These practices are considered unfair by definition and are unlawful:
- Payments made later than 30 days for perishable agricultural and food products, and later than 60 days for other products.
- Cancellation of orders for perishable products without sufficient notice.
- Unilateral changes to contract terms by the buyer.
- Refusal to provide written confirmation of agreements upon supplier’s request.
- Misuse of the supplier’s trade secrets.
- Commercial retaliation, including threats of delisting.
- Shifting certain costs onto the supplier, such as costs unrelated to the sale or investigation of customer complaints.
These black list practices largely mirror the list contained in Directive 2019/633, which identifies similarly prohibited practices for all Member States.
Grey List of Conditionally Unlawful Practices
Certain practices are not inherently prohibited but are unlawful unless they have been agreed upon clearly, unambiguously, and in writing before being applied:
- Returning unsold products to the supplier without payment or reimbursement for disposal.
- Fees requested from suppliers for storage, display, listing or promotional activities (e.g., marketing, advertising or staff costs).
This grey list is also derived directly from the minimum lists in the EU Directive.
Enforcement Mechanisms
Private Enforcement and Dispute Resolution
Suppliers may seek remedies through a specialised disputes committee established under the Act. They may also choose to bring claims directly before the civil courts instead of using the committee process. Buyers may only initiate civil court proceedings after first engaging with the disputes committee.
Public Enforcement by the ACM
The Netherlands Authority for Consumers and Markets (ACM) is the national enforcement authority under the Act. The ACM has broad enforcement powers, including:
- Initiating investigations on its own motion or based on complaints.
- Requesting information from parties.
- Conducting unannounced inspections.
- Imposing fines and other administrative sanctions.
- Issuing binding orders requiring cessation of unlawful practices.
Recent enforcement activity by the ACM has increased, with public decisions and commitments by infringing companies to amend contractual practices. For example, in September 2024, ACM imposed a cease and desist order on Royal Lactalis Leerdammer B.V. for failing to agree in advance on a transparent price-fixing system with dairy suppliers, thus contravening the Act’s requirements on fair contracting.
EU-Level Evaluation and Prospective Changes (2025–2026)
The European Commission carried out a formal evaluation of Directive 2019/633 at the end of 2025 to assess how effectively Member States have implemented and enforced the UTP framework. The evaluation concluded that the Directive remains coherent with broader EU policy objectives and provides EU added value by establishing minimum protections for farmers and small suppliers.
The report highlights areas where enforcement and cooperation could be strengthened, and the Commission announced intentions to review and potentially revise the UTP rules in future EU legislation, including proposals to enhance cross-border enforcement mechanisms.
Practical Impact and Compliance
Since the Act’s entry into force, its practical implementation across the Dutch agri-food market has revealed varying levels of awareness among buyers and suppliers. Surveys commissioned by ACM indicate that a significant number of larger buyers were not initially fully familiar with the prohibitions and obligations under the Act.
Market participants are advised to:
- Review and update their commercial contracts to ensure compliance with the Act’s black and grey lists.
- Establish clear written agreements for any practices that could fall under the grey list.
- Implement internal compliance processes addressing payment terms, order modifications and promotional fee arrangement.
Article published by Leeway (The Netherlands)
