On December 28, the President signed the act on counteracting the unfair use of contractual advantage in the trade in agricultural and food products. The new act will enter into force six months following the promulgation thereof

The conflict between the suppliers and the recipients of agricultural and food products has now become plainly evident all across Europe. Most countries have decided to resolve this issue through the use of applicable legal regulations (in early 2016, statutory regulations were in place in 20 EU Member States), while others, such as Belgium or the Netherlands, have opted for industry self-regulation. In Poland, these issues have so far been resolved by the common courts of law on the basis of various regulations, including the provisions of the act on counteracting unfair competition; this, however, has proved insufficient for the problem to be solved. Attempts at introducing industry self-regulation have also been ineffective due to the fact that the interested parties have ultimately failed to reach an agreement. For the above reason, it has become necessary to put these issues on a legislative footing.

We shall now present the most essential provisions of the act on counteracting the unfair use of contractual advantage in the trade in agricultural and food products, prepared by the Ministry of Agriculture and Rural Development.

1. What is contractual advantage?

Contractual advantage is a term which pertains to the relationship between the supplier and the recipient and occurs in cases where there is a significant disparity in economic potential between the two parties and where the weaker of these parties lacks the sufficient capacity for selling or purchasing agricultural or food products from other entrepreneurs.

The unfair use of contractual advantage may, in particular, involve any of the following:

·         unreasonable termination of an agreement or threatening the termination thereof,

·         arrangements whereby only one of the parties is entitled to terminate or determine an agreement or to withdraw from such agreement,

·         making the conclusion or continued existence of an agreement dependent upon the acceptance or performance by one of the parties of another transaction unrelated to such an agreement,

·         unreasonable extension of payment periods.

2. Who may lodge a complaint of unfair use of contractual advantage?

Any entrepreneur who has a reasonable suspicion that it is being subjected to any practices which involve the unfair use of contractual advantage may submit a written complaint to the President of the Office of Competition and Consumer Protection. The Office of Competition and Consumer Protection may only intervene where the total value of the turnover between the supplier and the recipient exceeded the amount of PLN 50 thousand during any of the two years preceding the year in which the proceedings are initiated and where the turnover of the supplier or recipient which applies the practices in question exceeded PLN 100 million during the year preceding the year in which the proceedings are initiated.

The complaint submitted by the entrepreneur must indicate the entity accused of the unfair use of contractual advantage, describe the facts of the case and contain information pointing towards an infringement of the provisions of the act as well as the personal data of the entrepreneur filing the complaint. In addition, the entrepreneur filing the complaint shall attach to such complaint all the documents which may serve as evidence in the given case.

3. Which persons or entities are barred from lodging a complaint?

The provisions of the act shall not apply to situations where the supplier sells products to cooperatives, groups and organisations of fruit and vegetable producers of which it is also a member.

4. Who initiates the proceedings?

Proceedings concerning the unfair use of contractual advantage shall be initiated by the President of the Office of Competition and Consumer Protection; the proceedings are therefore initiated ex officio and not at the request of any party to such proceedings. The proceedings shall be completed within the period of 5 months and may be preceded by an investigation procedure.

5. What are the new powers of the Office of Competition and Consumer Protection?

Where the entity which applied the practices alleged to constitute an unfair use of contractual advantage continues to apply such practices, the President of the Office of Competition and Consumer Protection shall order the cessation thereof until a decision concerning such practices is adopted. The President shall also have the right to impose upon an entrepreneur a fine in the amount of up to 3% of the turnover attained during the year preceding the year in which the penalty in question is imposed.

6. Is the Office of Competition and Consumer Protection entitled to refrain from imposing a fine?

An entrepreneur may voluntarily undertake to refrain from the use of unlawful practices or to remedy the consequences thereof. In such case, the President may adopt a decision in which it imposes upon the party in question an obligation to comply with its undertakings. Where a decision of this kind is adopted, no fine shall be imposed.

7. When does the new law enter into force?

The act on counteracting the unfair use of contractual advantage in the trade in agricultural and food products shall enter into force six months following the promulgation thereof.

Additional information for the media:

Press Office
pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone: 22 827 28 92, 55 60 314 , 55 60 111
E-mail: biuroprasowe@uokik.gov.pl

Twitter: @UOKiKgovPL