In the course of the supervisory procedure, the Authority found that the suppliers of food supplements were subject to contractual conditions which did not allow them to comply with the 30-day payment period prescribed in an Act.
The Act provides that the period financed from the own resources of agricultural and food producers may not exceed one month. This means that each supplier must be able to receive regular and timely remuneration for its production. Timely payments provide producers with a more stable economic environment in which it is possible to forecast and implement their cash flow and activities more efficiently. Late payment (for example, if the buyer makes the start of the payment period dependent on the resale of the goods) negatively affects the economic viability of producers and therefore such practices are prohibited by law.
In addition, the wholesalers’ agreements contained clauses requiring the suppliers to reimburse the purchase price of expired or near-expiration goods and to bear the costs of their destruction or handling. In the opinion of the Competition Authority, the indemnification agreement could not be regarded as the return of ordinary unsold goods (which is permitted under clause 6 (1) 1) of the Act on Combating Unfair Trading Practices in the Agricultural and Food Supply Chain), but was a prohibited activity in the context of which compensation is claimed for the deterioration of goods.
Entrepreneurs subject to an injunction must bring their contract terms into line with the Act.
The precepts are available on the Competition Authority’s website.
The Competition Authority will continue to monitor unfair trading practices. This year’s focus is, among other things, on contracts between retailers and food producers.
It is possible to notify the Competition Authority of unfair commercial practices anonymously via the tips portal or by e-mail to [email protected].
The Competition Authority exercises state supervision over competition, electricity, natural gas, district heating, postal services, public water supply and sewerage, as well as railways, aviation and ports, and fights against unfair trading practices in the agricultural and food supply chain. The Authority is within the area of government of the Ministry of Justice and Digital Affairs.