It is necessary to ensure continuous supervision of unfair trading practices in the agricultural and food supply chain and to assess market activities in order to prevent restrictions or distortions of competition in this segment of the market. Under the Agriculture Act the Agency is the enforcement authority competent for the supervision of prohibited trading practices in the agricultural and food supply chain (Articles 61f and 61g of the Agriculture Act) and to impose fines as an infringement authority. The Agency actively cooperates with the Ombudsman for Relations in the Food Supply Chain. The latter monitors the behaviour of stakeholders in the chain and notifies the Agency of possible prohibited practices.
Agriculture Act defines prohibited trading practices as practices by which a contracting party, which is an undertaking in accordance with the Competition Act, with its significant market power, which is evident from the annual turnover in particular in relation to the other contracting party, exploits the other contracting party.
A buyer shall be deemed to have significant market power if the annual turnover generated in the previous year by:
1. the supplier does not exceed EUR 2,000,000 and the buyer exceeds EUR 2,000,000;
2. the supplier exceeds EUR 2,000,000, but does not exceed EUR 10,000,000, and by the buyer exceeds EUR 10,000,000;
3. the supplier exceeds EUR 10,000,000, but does not exceed EUR 50,000,000, and by the buyer exceeds EUR 50,000,000;
4. the supplier exceeds EUR 50,000,000, but does not exceed EUR 150,000,000, and by the buyer exceeds EUR 150,000,000;
5. the supplier exceeds EUR 150,000,000, but does not exceed EUR 350,000,000, and by the buyer exceeds EUR 350,000,000.
Agriculture Act lists 27 prohibited trading practices:
1. reimbursement for services not performed or for services performed but not agreed in writing and clearly in advance between the parties;
2. reimbursement for the classification, maintenance or expansion of the assortment or products;
3. reimbursement for the storage or display or placing of products on shelves at points of sale, or for making such products available on the market, or for staff costs for furnishing premises used for the sale of the supplier's products, unless the supplier and buyer clearly and unequivocally agree in advance in the supply contract or subsequent written agreements between the supplier and the buyer, which will be performed and the realization of which can be proven;
4. charging the costs of discounts on the promotion, advertising and marketing of agricultural and food products, unless the supplier and the buyer agree in writing, clearly, unambiguously and in advance in the supply contract or subsequent written agreements between the supplier and the buyer to prove;
5. reimbursement of costs for concluding the contract;
6. contribution to the expansion of the trade sales network, improvement or rearrangement of existing points of sale, expansion of storage capacities, expansion of the distribution network and similar activities;
7. return of unsold agricultural and food products to the supplier referred to in the second paragraph of Article 61.b of the Agriculture Act, which are not perishable and whose shelf life is at least one third from delivery to maturity, without the buyer paying for these unsold products or not to pay for the removal of these products or both, unless the return has been clearly and unambiguously agreed in advance in the supply contract or in subsequent written agreements between the supplier and the buyer, which will be carried out and whose realization can be demonstrated;
8. payment for goods that were not sold during the duration of the campaign, at purchase promotional prices;
9. regular or disproportionate charging of a discount for the payment of invoices before the due date;
10. charging compensation for a reduction in turnover, sales or margin due to reduced sales of certain goods;
11. non-compliance with the payment deadlines referred to in the Agriculture Act;
12. non-acceptance of the agreed quantities of products in accordance with the agreed dynamics of purchase, if the latter deviates from the agreement by more than 25 percent;
13. making the conclusion of a contract or business cooperation conditional on counter-supply on non-competitive terms;
14. demanding the exclusivity of the sale of individual goods, except for goods produced for sale under a trademark or at the request of a customer and according to the customer's specifications;
15. making the conclusion or renewal of a contract or the taking over of products conditional on the requirement to manufacture and supply products for a trade mark which are considered to be interchangeable with the manufacturer's trade marks;
16. buyer's requirement to supplier not to sell the products to third parties at lower prices than those paid by the supplier;
17. cancellation of the order for perishable agricultural and food products within such a short period of time that the supplier cannot reasonably be expected to find an alternative way of marketing or using those products; cancellation within a period of less than 30 days is always considered a short period;
18. discriminatory or disproportionate charging of compensation for unloading the delivered goods;
19. demanding payment for the deterioration or loss of agricultural and food products, or both, which occur at the buyer's premises or after the transfer of ownership to the buyer, where such deterioration or loss is not due to the negligence or fault of the supplier;
20. the transfer of business risk to the customer after delivery for fines or other penalties imposed, unless the fine or other penalty imposed is due to a defect in the goods for which the supplier is responsible;
21. imposing disproportionate or unfair contractual penalties;
22. prohibition of assignment of receivables;
23. refusal to confirm in writing the terms of the supply contract between the buyer and the supplier, or failure to fulfill the obligations referred to in Article 61g of the Agriculture Act regarding the written form or mandatory components of the contract;
24. unilateral change of the terms of the contract for the supply of agricultural and food products concerning the frequency, manner, place, deadlines or scope of the supply or delivery of agricultural and food products, quality standards, payment terms or prices, or concerning the provision of services;
25. unlawful acquisition, use or disclosure of a supplier's trade secret by the buyer in accordance with the law governing trade secret;
26. threats by the buyer with retaliatory measures (e.g. withdrawal of products from the offer, reduction of ordered quantities of products or interruption of certain services provided by the buyer to the supplier, such as marketing or promotion of the supplier's products) or implementation of such measures if the supplier legal rights, including filing an application with the bodies referred to in Article 61i of the Agriculture Act or by cooperating with these bodies during the procedure;
27. buyer's requirement to reimburse the costs incurred in examining the customer's complaint concerning the sale of the supplier's products, even if it is not negligence or fault on the part of the supplier.
If the contract contains prohibited practices, such provisions of the contract shall be null and void.