Unfair trading practices: CCA imposes HRK 350,000 fine on mandarin oranges buyer JASENSKA from Opuzen

The Croatian Competition Agency (CCA) opened ex officio infringement proceeding against the mandaring oranges buyer Jasenska within the meaning of the Act on prohibition of unfair trading practices in the business-to-business food supply chain (UTPs Act) with the view to establishing whether this buyer of mandarin oranges used its strong bargaining power and imposed unfair trading practices on its suppliers.

In the course of the proceeding the CCA found that the mandarin oranges buyer used its strong bargaining power and, in the mandarin orange season of 2018, imposed on its mandarin oranges suppliers a number of unfair trading practices.

First, Jasenska’s general terms of purchase did not contain provisions on the terms of payment and the time and place of delivery of mandarin oranges, which contravenes with the provisions of the UTPs Act.

Second, the CCA found, based on the sampling method of 5 suppliers that Jasenska closed the business deals with, that the purchase agreements did not clearly define the price and/or provide the method for calculation or correction of the price, in other words, they did not provide for the quality parameters of the product concerned that should be used to calculate the price of an agri product. In addition, the agreements did not clearly define the terms and the time of delivery in the orange mandarin season of 2018, which made the terms and the time of delivery vague and ambiguous. Under the UTPs Act these provisions are considered mandatory for any written agreement between the supplier and the buyer, they must be laid down clearly and unambiguously whereas ignoring them constitutes a serious infringement of the UTPs Act.

Third, besides the above-mentioned unfair trading practices the CCA also found on the basis of the sampling method involving 5 suppliers that Jasenska concluded and implemented the storage and preservation agreements about the delivery of the unsorted and unripe orange mandarins for further market placement, despite the fact that this had not been regulated by the storage and preservation agreements, or the production and delivery agreements, which  de facto postponed the actual time of delivery of mandarin oranges and consequently transferred all the operational risk related to the agricultural products concerned to the suppliers, which on the other hand constitutes the imposition of unfair trading practices on the suppliers in the sense of the UTPs Act.

Finally, by refusing to take over the delivery of mandarin oranges on 8 days of the mandarin season of 2018, whereas the justified reasons for any possible refusal of delivery of the agri product in this particular case had not been established by virtue of the relevant agreements, Jasenska imposed unfair trading practices on all its suppliers of orange mandarins within the meaning of UTPs Act.

Therefore, taking into account the gravity, the scope and the duration of the infringement concerned and the consequences for the suppliers, Jasenska was imposed a fine in the amount of HRK 350,000.

It is the view of the CCA that the fine is proportional to the gravity, scope and duration of the infringement and that it will have a deterrent effect not only on Jasenska but also on other re-sellers, buyers and/or processors in the food supply chain.

The CCA prohibited Jasenska any further behaviour that constituted unfair trading practices under its decision and ordered Jasenska to provide evidence that the agreements with its suppliers have been brought into compliance with the provisions of the UTP’s Act.

The integral decision of the CCA in this case in the Croatian language is available http://www.aztn.hr/ea/wp-content/uploads/2021/02/UPI-034-032019-04001-1.pdf