Five investigations are underway in Belgium into unfair trading practices in the potato trade. The investigations focus on violations of the so-called UTP law.
Earlier this year, several buyers in Belgium withdrew potato contracts or unilaterally reduced contracted quantities. Several organizations filed complaints about this, and action was taken.
The Federal Public Service Economy's (FPS Economy) Economic Inspectorate says it is conducting the investigation into the companies involved on its own initiative. The investigation focuses on the extent to which the law regarding unfair trading practices between businesses in the agricultural and food supply chain has been violated.
The so-called UTP Act is intended to ensure that small and medium-sized suppliers are better protected against larger buyers. This law includes a blacklist of commercial practices that are prohibited in all cases. This list includes, among other things, the unilateral amendment of the terms of a supply agreement by the buyer. It also stipulates that a buyer may not cancel at such short notice that the supplier cannot find an alternative.
Three reports
The investigation has now resulted in three official reports. This is seen as a necessary first step towards imposing sanctions on companies where abuses have been identified. This could result in a settlement, but it could also lead to administrative or criminal prosecution. In cases of unfair commercial practices, a competent minister or the Director General of the Economic Inspectorate can also decide to have the company cease trading through a cease-and-desist order issued by the court.
According to the Federal Public Service Economy, the number of investigations could be further expanded. The agency notes that the investigation is very complex. Therefore, it may take some time before a final assessment can be made.
Unacceptable
The Belgian potato organization Belpotato.be was astonished at the beginning of March to learn that signed contracts had been unilaterally amended without any form of consultation. "This is unacceptable," concluded the organization, which has worked extensively in recent years to update the code of conduct for drawing up contracts in the potato sector. "Mutual respect and trust are essential for a good relationship between growers and their buyers."
Following the problems this spring, the code of conduct is being tightened again. A working group led by the Federal Public Service Economy hopes to establish new rules for entering into contracts in the potato sector by the end of this month.
According to the Federal Public Service Economy, the problems with potato contracting that arose this year are high on the agenda of Federal Minister of Economy and Agriculture, David Clarinval. "I want fair trade relations in the potato sector. The abuses observed this year are unacceptable," Clarinval stated in a statement from the Belgian Farmers' Union.