First effects of the UTPs Act – payment deadlines observed

In a panel discussion “Unfair trading practices – Croatian legal framework and implementation issues with respect to EU experience” there were several experts who participated besides Vesna Patrlj from the Croatian Competition Agency (CCA): Krunoslav Karalić, assistant minister for agriculture (Directorate for agriculture and food industry), Annette Kliemann from the EU Directorate General Agriculture and Rural Development, Biljana Borzan, representative in the European Parliament and Božica Marković, director at the Agriculture, Food Processing Industry and Forestry at the Croatian Chamber of the Economy.

All participants agreed at the very beginning of the discussion that the adoption of the Act on the prohibition of unfair trading practices in the business-to-business food supply chain (UTPs Act) was a big step forward that already brings the first results despite only six months passed from the start of its full application.

Karalić briefly stated the reasons why it was of paramount importance to adopt the UTPs Act. The unfair trading practices have been rather common and it was absolutely necessary to establish the rules to ensure that the members in the food supply chain are protected from unfair trading practices.

Borzan pointed out that the Croatian UTPs Act was adopted before the EU Directive came into force and this is a positive step given the fact that usually the rules are first adopted at the EU level and then later in Croatia. She noted how important it was to have the UTPs Act in the food supply chain considering the fact that the share in the total revenue of the participants in the food supply chain is unevenly distributed – some 51 % share is held by traders, 28 % by the buyers and only 21 % by the manufacturers. In her opinion, the uneven distribution of the revenue should lead to urgent adoption of the EU Directive that would contribute to fairer revenue distribution.

Kliemann noted that the EU Directive would probably be adopted by the end of the year and that would be her pleasure to cooperate with Croatia considering the fact that the rules in the area concerned have already been fully applicable in Croatia. In her view, it would be crucial that the authorities empowered to enforce the rules in question within the meaning of the future EU Directive would not only open ex officio proceedings but also impose sanctions with a deterrent effect that would prevent unfair trading practices in the food supply chain.

Marković underlined that one of the first efficiencies in the implementation of the rules establishing the unfair trading practices is financial discipline among the undertakings that now observe the payment deadlines. She reminded other panellists that Croatia used to have a late payment bylaw but only after the UTPs Act become applicable the actors in the food supply chain started to fulfil their payment obligations on time. Giving praise to the transparency of the work of the CCA, she approved of its achievements in dealing with this matter urgently particularly when it comes to sending quick replies to the queries of the undertakings.

The vice-president of the CCA, Vesna Patrlj, draw the attention of the audience to the implementation of the UTPs Act that became fully applicable in Croatia on 1 April 2018. In only six months of its full application the CCA opened 182 cases and instituted 25 ex officio administrative proceedings against a number of traders and buyers of grains and fruit and vegetables and published this information on its website. Considering that she could not comment on the on-going cases due to the confidentiality clause, Patrlj explained the steps in the administrative proceeding in UTPs matters and the investigation that must be undertaken by the CCA before an infringement decision is taken and fine imposed within the meaning of the UTPs Act and the General Administrative Procedure Act. She also explained what issues fall outside the authority of the CCA and highlighted the cooperation between the CCA and the Ministry of Agriculture where CCA expert support is needed in drafting of position papers dealing with particular provisions of the Proposal for a Directive of the European Parliament and of the Council on unfair trading practices in business-to-business relationships in the food supply chain. She also welcomed the adoption of the EU Directive in question given that it would serve as a good starting point for the exchange of experience between the Member States in the implantation of the rules concerned.