Unfair Trading Practices Enforcement Authority

UTPs can broadly be defined as practices that grossly deviate from good commercial conduct, are contrary to good faith and fair dealing and are unilaterally imposed by one trading partner on another.

Increased concentration and vertical integration of market participants have led to structural changes in the agricultural and food products supply chain. These developments have contributed to a situation of significantly different levels of bargaining power and economic imbalances in individual trade relations between the actors in the chain.

While differences in bargaining power are common and legitimate in commercial relationships, the possible abuse of such differences can sometimes lead to unfair trading practices. Such UTPs are detrimental mainly to otherwise viable smaller operators which can include agricultural producers and SME processors of food products and may impact their ability to innovate and undertake new financial investments in new products and technology.

An EU Directive on UTPs in business-to-business relations in the agricultural and food supply chain was adopted in April 2019, which set out minimum harmonised rules on UTPs for all EU Member States; 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 (hereafter referred to as the Directive).

The provisions of the Directive were adopted on 28^th April 2021 when Charlie McConalogue TD, Minister for Agriculture, Food and the Marine signed the UTP Regulations: Statutory Instrument (SI) No. 198 of 2021 European Union (Unfair Trading Practices in the Agricultural and Food Supply Chain) Regulations 2021.

Yes. The UTP Regulations require that;

(i) all supply agreements entered into since 28^th April 2021 were required to be compliant with the UTP Regulations from 1^st July 2021, and  

(ii) all supply agreements that were in place before 28^th April 2021 when the Minister signed the UTP provisions in law had to be in adherence with the UTP Regulations from 28^th April 2022.

Each EU Member State must designate an enforcement authority to enforce UTP rules.

Ireland has established the Enforcement Authority (EA) in the Department of Agriculture, Food and the Marine to enforce the UTP rules.

The Agricultural and Food Supply Chain Bill which was approved by Government for presentation to the Houses of the Oireachtas in November 2022 is currently progressing through the legislative process and will establish a new independent statutory Authority to be known as An Rialálaí Agraibhia (The Agri-Food Regulator). 

The enabling provisions in the Bill will provide for the transfer of responsibility of UTP enforcement functions from the EA to the remit of the Regulator which is expected to occur at the time of commencement of the Act. The Bill will also grant the regulator additional powers to promote fairness and transparency in the agricultural and food supply chain. 

Agricultural and food products. This is defined as meaning ‘products listed in Annex I to the Treaty on the Functioning of the EU (TFEU) as well as products not listed in that Annex but which are processed for use as food using products listed in that Annex’.   

Annex I to the Treaty on the Functioning of the European Union 

In case of doubt, the EU’s ‘Combined Nomenclature’ gives detailed elaboration of the content of the individual chapters / products listed in Annex I to TFEU. The ‘Combined Nomenclature’ is covered in Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff.  

In accordance with Article 12 of that regulation, a revised list of the ‘Combined Nomenclature’ is produced annually to reflect developments in respect of the international ‘Harmonized System Nomenclature’ to which the EU is a signatory. A link to the most recent Combined Nomenclature list is provided below

Commission Implementing Regulation (EU) 2022/1998 of 20 September 2022 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff  applicable as from 1 January 2023. 

However, it is important to emphasise that, for the purposes of the UTP Regulations, ‘Agricultural and food products’ are only those that are covered through references to Annex I to TFEU.

The number and type of agricultural and food products that the UTP Regulations apply to is very extensive and includes:

• Agricultural products directly listed in Annex I, such as live animals, live trees and other plants, cut flowers and ornamental foliage, cereals, and milling industry products.

• Food products directly listed in Annex I, such as vegetables, fruit, fish, meat and dairy produce.

• Products processed from Annex I products for use as food, such as chocolate, prepared meals or sauces and processed dairy products (e.g. dairy spreads or yoghurts).

Section 2 of the national UTP Regulations and Article 2(1) of the UTP EU Directive 2019/633 define “agricultural and food products” as “products listed in Annex I to the TFEU as well as products not listed in that Annex, but processed for use as food using products listed in the Annex” – Annex I to the Treaty on the Functioning of the European Union (TFEU)

Article 2(a) of Directive 2002/46/EC (on food supplements) defines food supplements as “foodstuffs the purpose of which is to supplement the normal diet and which are concentrated sources of nutrients of other substances with an nutritional or physiological effect, alone or in combination, marketed in dose form, namely in forms such as capsules, pastilles, tablets, pills or other similar forms, sachets of powder, ampoules of liquids, drop dispensing bottles, and other forms of liquids and powders designed to be taken in measured small unit quantities”.

Article 2 of Regulation (EC) No 178/2002 (General Food Law Principles/Requirements) defines “food or foodstuff” as “any substance or product, whether processed, partially processed or unprocessed, intended to be, or reasonably expected to be ingested by humans”.

Therefore, where food supplements are processed for use as food using products listed in Annex I TFEU, they are covered by the provisions of the UTP Regulations.   

No, as medicinal products are not deemed to be food.

Section 2 of the national UTP Regulations and Article 2(1) of the UTP EU Directive 2019/633 define “agricultural and food products” as “products listed in Annex I to the TFEU as well as products not listed in that Annex, but processed for use as food using products listed in the Annex” – Annex I to the Treaty on the Functioning of the European Union (TFEU).

Article 2 of Regulation (EC) No 178/2002 (General Food Law Principles/Requirements) defines “food or foodstuff” as “any substance or product, whether processed, partially processed or unprocessed, intended to be, or reasonably expected to be ingested by humans”. However, Article 2(d) of this Regulation further adds that “‘Food’ shall not include: medicinal products within the meaning of Council Directives 65/65/EEC and 92/73/EEC”

The Regulations aims to protect those suppliers which, due to a weak bargaining position relative to the buyer of their product need such protection. ‘Suppliers’ include farmers and their organisations (for example cooperatives, representative and producer groups), nurseries, but also suppliers of agri-food products which are further downstream, including small and medium or certain mid-range enterprises such as manufacturers or distributors, fall within the scope of protection.

The Regulations offers protection along the agri-food supply chain depending on the relative size of operators. It uses a ‘step approach’ based on turnover figures that reflects the different bargaining powers of suppliers and buyers. The step approach protects a supplier from UTPs engaged in by an economically stronger buyer.

For example, a business with a turnover of less than €2 million is offered protection against buyers whose turnover exceeds €2 million while those suppliers with turnover above €2 million but not exceeding €10 million are protected against buyers which have a turnover higher than €10 million.

The various categories of businesses covered by the UTP Regulations are set out below;

• suppliers which have an annual turnover not exceeding €2m to buyers which have an annual turnover of more than €2m,

• suppliers which have an annual turnover of between €2m and €10m to buyers which have an annual turnover of more than €10m,

• suppliers which have an annual turnover of between €10m and €50m to buyers which have an annual turnover of more than €50m,

• suppliers which have an annual turnover of between €50m and €150m to buyers which have an annual turnover of more than €150m,

• suppliers which have an annual turnover of between €150m and €350m to buyers which have an annual turnover of more than €350m, and

• suppliers which have an annual turnover not exceeding €350m to all buyers which are public authorities.

The Regulations do not provide for arrangements between suppliers and consumers.

The protective effect covers suppliers having turnovers of up to €350 million.

The annual turnover is determined by calculating the income that an enterprise received during the year in question from the sale of products and provision of services falling within the company’s ordinary activities, after deducting any rebates. Turnover should not include value added tax (VAT) or other indirect taxes.

Turnover is determined on an annual basis from the latest approved accounting period and can be taken into account from the date of closure of the accounts.

When determining the annual turnover, it is irrelevant whether a business only generates turnover with agricultural or food products or whether these products only make up a small part of the turnover. It is the total turnover in the annual financial statements that counts.

In the case of an autonomous business, the turnover is determined exclusively on the basis of the accounts of that enterprise. The turnover of an enterprise having partner enterprises or linked enterprises are determined on the basis of the accounts and other data of the enterprise or, where they exist, the consolidated accounts of the enterprise, or the consolidated accounts in which the enterprise is included through consolidation. Further clarifications on these points are explained on p.15 - 23 of the EU revised user guide to the SME definition (2020)

According to the definition in section 2 of the UTP Regulations (and Article 2 (5) of the Directive), perishable agricultural and food products means ‘agricultural and food products that, by their nature or at their stage of processing, are liable to become unfit for sale within 30 days after harvest, production or processing.’

The following text from Recital 17 of the Directive also deals with perishability considerations where it states: ‘A product should be considered perishable if it can be expected to become unfit for sale within 30 days from the last act of harvesting, production or processing by the supplier, regardless of whether the product is further processed after sale, and regardless of whether the product is handled after sale in accordance with other rules, in particular food safety rules. Perishable products are normally used or sold quickly.’

The definition in the Regulations (which includes definitions from the Directive) does not contain any reference to the ‘handling’ of a product but refers to the ‘nature or stage of processing’ of the product. For that reason, any subsequent handling, e.g., cold storage, is not to be taken into account for products in their natural state or for products which have not been subject to an act of processing that changed their natural state, when determining whether a certain product is to be considered perishable. This, however, also means that prior to the sale of a product to a buyer, if the product has been subject to any act of processing that changes the nature of the product (e.g. freezing) as a result of which it must be handled in a certain way in order to be able to remain fit for sale (e.g. maintained as frozen), then a continuation of this handling by the buyer can be taken into account when considering whether it falls within the perishable agricultural and food product definition.

The clarification in Recital 17 of the Directive also means that a product should be regarded as perishable, regardless of the individual use which a buyer might envisage for a perishable product. Taking into account the purpose of the intended and individual usage of the product by the buyer will undermine the protection that the Directive and Regulations attempts to give by setting stricter deadlines for payment of perishable products.

Yes, the Regulations are applicable if either the supplier or the buyer is based within Ireland.

Two key factors must be considered to establish correct payment period applicable to suppliers of agricultural and food products under the UTP Regulations. It must be established:

• If the supply agreement provides for the delivery of goods on a regular basis, and

• If the product falls within the definition of a ‘perishable agricultural and food product’ (see FAQ#9 for guidance on this).

Buyers and their suppliers should come to a mutually agreed position on whether the traded product falls within the definition of a ‘perishable agricultural and food product’ for the purposes of the UTP Regulations, as this determines whether the product must be paid for within 30 days or 60 days.  The EA would only become involved on receipt of a complaint where there is an unresolved dispute between the parties.  A case-by-case assessment would be necessary should such circumstances arise.

 Supply agreement provides for delivery of goods on a regular basis:

• For perishable agricultural and food products, a buyer shall not pay a supplier later than 30 days after the end of an agreed delivery period in which deliveries have been made or later than 30 days after the date on which the amount payable for that delivery period is set, whichever of those two dates is the later,

• For other agricultural and food products, a buyer shall not pay a supplier later than 60 days after the end of an agreed delivery period in which deliveries have been made or later than 60 days after the date on which the amount payable for that delivery period is set, whichever of those two dates is the later,

• The agreed delivery period shall be not more than one month, and

• Where the buyer sets the amount payable, the payment period shall start to run from the end of an agreed delivery period in which the deliveries have been made

No provision in supply agreement for delivery of goods on a regular basis:

• For perishable agricultural and food products, a buyer shall not pay a supplier later than 30 days after the date of delivery or later than 30 days after the date on which the amount payable is set, whichever of those two dates is the later

• For other agricultural and food products, a buyer shall not pay a supplier later than 60 days after the date of delivery or later than 60 days after the date on which the amount payable is set, whichever of those two dates is the later

• Where the buyer sets the amount payable, the payment period referred to shall start to run from the date of delivery

The only exceptions to the above requirements are if:

• A buyer and a supplier agree on a value sharing clause within the meaning of Article 172a of Regulation (EU) No 1308/2013 (Common Market Regulation).

• The buyer makes payment under the framework of the school scheme pursuant to Article 23 of the EU Common Market Regulation.

• The payment is made by a  public entity providing healthcare in the meaning of point (b) of Article 4(4) of Directive 2011/7/EU (Late Payments Commercial Transactions), or

• The supply agreement is between a supplier of grapes or must for wine production and their direct buyer (separate specific provisions apply) 

Clarification of the term ‘on a regular basis’:

• For certain agricultural and food products, delivery occurs on a daily basis or several times during a week or a month. The notion ‘on a regular basis’ is meant to cover these situations in terms of recurring deliveries at certain time intervals, regardless of the quantities.

• Other intervals (e.g. fortnightly deliveries) are also possible, provided that the period for grouping deliveries together for payment purposes does not exceed one month.

• It is not necessary that such ‘regular delivery’ patterns occur throughout the entire year, they might also occur only during certain periods of the year.

• The rationale of this provision is to avoid daily invoicing which would result in excessive administrative burden for the parties.

Clarification of the term ‘delivery period’:

• This refers to the period set by the parties for the regular deliveries.

• The UTP Regulations do not impose any restrictions as regards the delivery periods which suppliers and buyers can agree upon.

• The Regulations only puts a restriction on the length of the payment period. In order to avoid daily invoices in situations of regular deliveries, for instance in the milk sector, the Regulations allows for grouping several deliveries together, but with a maximum limit of one month, the end of which triggers the 30 days period.

• This means that, in a situation of a five-week delivery period, the 30 days would nonetheless start after the end of a month, also for the deliveries made in the fifth week.

Where the buyer sets the amount payable, the payment period must commence for product delivered on a regular basis from the end of the agreed delivery period in which the deliveries have been made. Where delivery of product does not occur on a regular basis and the buyer sets the amount payable, the payment period must commence from the date of delivery. However, if the supplier ‘sets the amount payable’, the commencement of the payment period can be more flexible.

The payable amount can be set by invoice of the supplier on the basis of the following text from recital 17 of the Directive (2019/633): ‘In accordance with (the Late Payments Commercial Transactions) Directive 2011/7/EU of the European Parliament and of the Council it should also be possible to consider the date on which the amount payable for an agreed delivery period is set, for the purposes of this Directive, as the date of the issuance of the invoice or the date of its receipt by the buyer’.

Example – calculation of payment deadline where price has been agreed between the buyer and supplier before delivery

The ‘end of agreed delivery period’ or ‘delivery date’ is 30^th August

• The buyer sends a statement setting out the amount payable on 11^th September → The payment deadline must be calculated from 30^th August

• The supplier invoices the buyer for the amount payable on 11^th September → The payment deadline must be calculated from 11^th September

Note: In the situation only the supplier can set a date later than delivery timing for the relevant payment period to commence.

The UTP Regulations do not provide for payments in instalments. The Regulations require the payment of the total amount within the stipulated deadline.

However, if the supplier ‘sets the amount payable’, the Regulations do not prevent the supplier when setting the amount payable by way of invoice, to send two invoices covering together the overall sales price at different points in time and thus generate two respective payment periods.

Yes, the important factor in this case is not the wording of the supply agreement but the actual behaviour of the buyer. Buyers will be found to have acted unfairly even if the content of the supply agreement is fully compliant with UTP rules if, for example, they

i.         Do not make payments to their supplier on time

ii.       Acquire, use or disclose trade secrets without the consent of the supplier or

iii.      Threaten commercial retaliation against suppliers who exercise their contractual/statutory rights.

If you are a supplier of agricultural or food products and feel you have been the subject of an unfair trading practice, please provide details of your complaint in confidence to the Enforcement Authority [HERE] through our secure online complaint submission Please note the form can be accessed on Google Chrome, Microsoft Edge or Mozilla Firefox web browsers.

We recommend providing unfair trading practices complaint details through our online form, but if you prefer you can contact the Enforcement Authority in confidence via: Email: utp@agriculture.gov.ie

Phone: +353 (0) 1 505 8607

Following receipt of the complaint, the Enforcement Authority will consider the information received and we will be back in touch within a reasonable period of time indicating how we intend to follow up on the complaint.

Yes. We fully understand that some suppliers impacted by UTPs may be anxious about their details being known by their possible non-compliant buyers on whom they are economically dependent. The EA therefore will, if requested, protect the identity and all other information, the disclosure of which, in your opinion, would harm your interests. 

If, in individual cases, the EA come to the conclusion that it would not be possible to complete the investigation of the complaint without disclosing your confidential information, we will inform you of this. You can then decide on the disclosure of your confidential information and how to proceed: if you consent to the disclosure of the information, the process can continue; if you do not agree, it will be discontinued.

The EA will examine your complaint and assess the details submitted to consider if a breach of the UTP rules may have occurred, and if further details are required to fully assess the matter.

If there is sufficient evidence to indicate a potential violation of the UTP rules the EA will initiate an investigation, subject to any request for confidentiality that you may have indicated. The EA will keep you informed about the status as well as the progress and outcome of your complaint.

No, you don't have to hire a solicitor. Please note that as an enforcement authority we are not in a position to provide a legal interpretation of the Statutory Instruments under which we operate. Individuals may of course, contact a solicitor to obtain independent legal advice.

When the EA receives a complaint, a person called an “authorised officer” will investigate the complaint. Authorised officers must carry out their investigation within the scope of the powers assigned to them by the Minister as set out in SI 198 of 2021, this also includes powers to enforce breaches.

These powers range from issuing formal compliance notices, to the submission of files for consideration for issuance of criminal proceedings. On conviction in the courts for a breach/breaches of UTP rules, a judge may impose:

• on summary conviction, a class A fine or imprisonment for a term not exceeding 6 months or both, or

• on conviction on indictment, a fine not exceeding €500,000 or imprisonment for a term not exceeding 3 years or both

The absence of a written supply agreement is a feature of normal business practice in some sectors, however if you wish you can ask your buyer to confirm the content of an oral supply agreement or an oral framework agreement in writing. If the buyer refuses to confirm verbally concluded delivery agreements in writing, this is a violation of the UTP Regulations, and you should submit a complaint to the EA.

The Regulations do not deal with issues of price setting or negotiation; therefore, this issue does not currently fall into the scope of the investigate powers of the EA.

No, the ban on UTPs only applies to business-to-business relationships in the agricultural and food supply chain. It does not apply to sales to consumers.

Prior to the 2019 UTP Directive coming into force the EU Commission examined this aspect as part of a more detailed analysis and they found no evidence that Member States with stringent UTP Regulations had witnessed stronger inflationary effects concerning consumer food prices than those with less stringent rules or no rules on UTPs – EU Commission Impact Assessment to improve the food supply chain (unfair trading practices) (April 2018)

Consumers could benefit from an increase in innovative products from buyers which could be created by suppliers broadening their product range, as the UTP rules should give suppliers more confidence to engage with buyers. Fresh produce suppliers should grow, confident under the protection of the UTP rules to work closely and on longer contracts with retailers.