Govt forwards unfair trade practices bill to parliament

The Croatian government on Thursday forwarded to parliament a bill on the prevention of  unfair trading practices in the food supply chain, which is designed to protect domestic producers from unfair treatment by traders.

The purpose of the bill is to protect domestic farmers and the food industry, Agriculture Minister Tomislav Tolusic said, stressing that 22 of the 28 EU member-countries already had such legal regulations in force.

PM Andrej Plenkovic said that the bill provided an opportunity for "a transformation of the Croatian economy" in the context of the crisis in the biggest Croatian company, Agrokor.

"This bill is expected to contribute to new practices and new rules and eventually to fairer trade and fairer relations among all stakeholders in that process," said Plenkovic.

The bill is aimed at preventing unfair trade practices that put buyers, processors and retailers in a more favourable position in relation to their suppliers.

The bill forbids traders whose annual revenue exceeds HRK 100 million to use their status to impose on producers various contract penalties. Other participants in the food supply chain, notably big buyers and processors with annual revenues of more than 50 million, will be put under the same type of monitoring as well.

This type of defining market strength means that the bill will refer to almost 95% of the food retail sector, said Tolusic.

The list of unfair trade practices consists of 25 different financial and other fees which traders and processors charge producers in order to buy their products or put them on their shelves.

The bill is designed to penalise unlawful or unfair transfers of costs or business risks onto the other side, seeking of fees for services that were not provided or were provided even though they were not contracted, unilateral changes to agreed terms by buyers, processors or traders, as well as the termination of the contract by the buyer, processor or trader without a period of notice or with an inappropriately short period of notice, unilateral changes of agreed terms, etc.

The bill also envisages a ban on the sale of finished products below their production price, including VAT.

The Market Competition Agency (AZTN) will oversee the implementation of the law and determine fines for those breaching it.

Text: Hina

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