• The act on counteracting the unfair use of contractual advantage in the trade in agricultural and food products shall enter into force on July 12 this year.
• Here you shall find the answers to the ten most frequently asked questions concerning the practical application of the new regulations.

The act on counteracting the unfair use of contractual advantage in the trade in agricultural and food products has been prepared by the Ministry of Agriculture and Rural Development. The aim of this act is, among other things, to eliminate unfair trading practices in the course of transactions between undertakings operating in the agricultural and food industry.

1.    What is contractual advantage and when does it occur?

Contractual advantage occurs in cases where there is a significant disparity in economic potential between the recipient and the purchaser and where the weaker of these two parties lacks the sufficient capacity for selling or purchasing agricultural or food products from other undertakings. It needs to be borne in mind that the mere fact of having a contractual advantage is not in itself prohibited, although the unfair exploitation thereof clearly is.

2.    In what situations will the UOKiK be entitled to intervene?

The Competition Authority 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.

3.    In what situations will the UOKiK refrain from intervening?

- The primary objective of the Act is the protection of the public interest. The activities of the UOKiK are designed to eliminate unfair practices from the market; they are not intended as a form of compensation for specific aggrieved parties— says Marek Niechciał, President of the UOKiK.

4.    What are the sanctions which the Competition Authority may impose?

The maximum amount of financial penalty for the abuse of contractual advantage which the UOKiK may impose shall amount to 3% of the turnover of the given undertaking achieved in the year preceding the year in which the penalty is imposed.

5.    Which sectors of industry will the new regulations apply to?

The Act only applies to entities operating in the agricultural and food industry. Should any other undertakings come to a conclusion that they have suffered losses as a result of the actions of their counterparties, they may still bring an action before a civil court on the basis of the provisions of the act on combating unfair competition. However, the Act in question does not apply to direct deliveries, i.e. to the manufacture of small quantities of products and the delivery thereof to consumers or local retailers that sell such products to consumers (e.g. the sale of a small quantity of agricultural produce by a farmer on the local market square).

6.    Are there any other exceptions in which the new regulations will not apply?

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.

7.    Does the Act also apply to the relations between suppliers and restaurant chains?

The Act does apply to such situations only where the products delivered are agricultural or food products. This is because other goods such as napkins or crockery are also routinely delivered to restaurants; these, however, fall outside the ambit of the Act.

8.    What is the definition of agricultural or food products within the meaning of the Act? 

The products in questions are edible goods, i.e. any substances or products designed for human consumption. The products in question may be:

• processed goods (such as. canned foods, jam, smoked meat, sugar),
• partially processed goods (e.g. raw products obtained as a result of animal slaughter and cutting — including pig half-carcasses),
• non-processed goods (e.g. fresh vegetables, fruit, meat).

The definitions of food products also covers drinks, chewing gum and any substances (including water) which are deliberately added to foodstuffs in the course of the manufacture, preparation or processing thereof. The definition excludes products such as animal feed, tobacco and plants awaiting harvest.

9.    Will the UOKiK be able to intervene in cases pertaining to the fees charged for publishing promotional items in in-store leaflets or for the delivery of goods from the warehouse facilities?

The very imposition of fees for promotional items in an in-store leaflet or for any other promotional or marketing activities (or for any transportation activities) is not prohibited in itself. What is prohibited, on the other hand, is the unfair use of contractual advantage in this context, such as:

• inflated, disproportionate fees for the services charged,
• mandatory bundling, e.g. where the consent for the acceptance of goods for sale is made conditional upon the purchase of the given service,
• failure to provide the services that had been previously agreed upon.

10.  In what situations will the supplier be considered to possess a contractual advantage?

An example of such situation is an undertaking which operates on a very large scale and remains the sole supplier of the given product in a specific area, while the purchaser is unable to acquire the product from any other entity.

The new law will enter into force on July 12, 2017. Cases involving contractual advantage shall be examined by the UOKiK Branch Office in Bydgoszcz.

Additional information for the media:

Press Office of the UOKiK
pl. Powstańców Warszawy 1, 00-950 Warszawa
Phone: 695 902 088, 22 55 60 430
Email: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL