The purpose of the Act on Combating Unfair Trading Practices in the Agricultural and Food Supply Chain is to protect sellers of agricultural products and foodstuff from unfair trading practices of buyers. The Act establishes public legal remedies applicable to the protection of the seller in addition to private legal remedies in the event of the use of an unfair trading practice, and provides the basis and procedure for state and administrative supervision over compliance with the law.
Agricultural product and foodstuff
The Act affects operators that buy or sell agricultural products and foodstuff to another operator. The list of products classified as agricultural products and foodstuffs within the meaning of the Act on Combating Unfair Trading Practices in the Agricultural and Food Supply Chain is set out in Annex I to the Treaty on the Functioning of the European Union. Products not listed in that Annex, but which are processed into foodstuffs using a product listed in Annex I to the same Treaty are also considered agricultural products and foodstuff. For example, in addition to conventional agricultural products and foodstuffs (milk, bread, white bread, cheese, etc.), agricultural products also include, for example, live animals, cut flowers, plants, bulbs, cereals, as well as animal feed.
Unfair trading practices
The Act lists 16 unfair trading practices, nine of which are prohibited in all cases and always, and seven unfair trading practices are prohibited unless they have been clearly and unambiguously agreed upon in a form that can be reproduced in writing.
In any case, the buyer is prohibited from
- paying for the agricultural product and foodstuff later than within 30 days as of the date provided in the draft;
- cancelling an order for an agricultural product or foodstuff with such short notice that it cannot reasonably be expected that the seller will find alternative means of commercialising or using that product;
- unilaterally changing the terms and conditions of a contract of sales that concern the frequency, method, place, time, or volume of the supply and delivery of the product, the quality standards, the terms of payment or the prices, or the provision of services directly related to the sale offered or provided by the buyer;
- requiring the seller to make a payment not related to the sale of the agricultural products and foodstuff of the seller;
- requiring the seller to make a payment for the waste or loss of agricultural products and foodstuff belonging to the buyer which has taken place on the premises of the buyer, but not due to the fault of the seller;
- refusing to confirm in writing the terms and conditions of the contract of sale agreed between the buyer and the seller if the seller has requested written confirmation;
- illegally obtaining, using, or disclosing the trade secret of the seller;
- threatening the seller with so-called trading retaliation if the seller exercises their contractual or statutory rights;
- claiming from the seller compensation for the costs incurred in dealing with customer complaints about the products of the seller, unless the cause of the complaint is due to the fault of the seller.
The buyer is prohibited from (in the absence of a written agreement to that effect)
- returning the unsold agricultural products and foodstuff to the seller without paying for the unsold products or their disposal;
- requiring the seller to make a payment for making available, storing, displaying, or listing the agricultural products and foodstuff on the market;
- requiring the seller to make a payment for the costs of promotion of the agricultural products and foodstuff sold by the buyer;
- requiring the seller to make a payment for the costs of advertising the agricultural products and foodstuff sold by the buyer;
- requiring the seller to make a payment for the costs of marketing the agricultural products and foodstuff sold by the buyer;
- requiring the seller to make a payment for personnel costs for the fitting-out of the sales areas used to sell the goods;
- requiring the seller to use only the transportation packaging provided, unless required by the relevant legislation.
The Act sets out the conditions that must be met if the latter unfair trading practices are used.
Submission of application
An application for the initiation of state or administrative supervision over an unfair trading practice may be submitted to the Estonian Competition Authority by:
- a seller
- a producer organisation or commercial association on behalf of its member;
- a seller organisation
- an association of the organisations specified in clause 2 or 3 of this subsection in the name of its member or in the name of a member of a member of the association of the organisations;
- another organisation that operates as a non-profit association and has a legitimate interest in representing a seller.
The application must include the name of the applicant, the clearly worded content of the application, the date of submission of the application and the signature of the applicant, the preferred method of delivery of the administrative act or other document and the necessary contact details, and other information required by law.
The Estonian Competition Authority may, on the basis of a reasoned request of an applicant, declare the name and other information of the applicant not to be disclosed to another person. Other information is, for example, a trade secret within the meaning of the Restriction of Unfair Competition and Protection of Business Secrets Act.
- Directive (EU) 2019/633 of the European Parliament and of the Council of 17 April 2019 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain.
- Annex I to the Treaty on the Functioning of the European Union, which lists the products which are classified as agricultural products and foodstuffs within the meaning of the Act on Combating Unfair Trading Practices in the Agricultural and Food Supply Chain
More information can be found on the unfair trading practises website of the Commission, including a list of authorities responsible for combating unfair trading practices in other countries.
Last updated: 03.10.2023