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Frequently asked questions on the prohibition of unfair trading practices

1. What are unfair trading practices?

Unfair trading practices are contractual clauses and practices that are considered unfair and therefore prohibited in supply relationships between large commercial and governmental buyers of agricultural, fishery and food products and smaller suppliers in terms of turnover.

2. Who determines which trading practices are unfair?

The Agrarorganisationen-und Lieferketten-Gesetz (Agricultural Organisations and Supply Chains Act, “AgrarOLkG”) regulates which trading practices are unfair. The contractual clauses and practices that are considered unfair under the Act are described in more detail here under "8. What trading practices are prohibited?". The Bundesanstalt für Landwirtschaft und Ernährung (Federal Agency for Agriculture and Food, “BLE”) is responsible for enforcing the prohibition of unfair trading practices.

3. Whom does the prohibition of unfair trading practices protect and who must comply with it?

The prohibition of unfair trading practices protects farmers and all suppliers of agricultural, fishery and food products, i.e. in particular also suppliers of the food processing industry. However, only suppliers who do not exceed certain annual turnover thresholds are subject to the protection of the AgrarOLkG. Moreover, the prohibition of unfair trading practices only applies if, at the time of conclusion of the contract, the annual turnover of the buyer is higher than the annual turnover of the respective supplier. For further information on the turnover thresholds, refer to The Prohibition of Unfair Trading Practices.

4. I do not know the turnover of my contract partner. How can I determine whether the prohibition of unfair trading practices applies to him?

You can contact your contract partner and ask him about the level of his turnover. To determine the turnover level of the respective business partner, suppliers and buyers are obliged to provide each other with information.
If you as a supplier do not want to ask your buyer about this or if he does not provide you with information about the level or amount of his turnover, you can contact the BLE. If there are indications of unfair trading practices, the BLE can start an investigation and also determine the amount of the buyer's turnover. In doing so, the BLE will protect your identity and any other information you consider confidential.
You can find the contact persons at the BLE under "20. Who can I contact?".

5. Does the prohibition of unfair trading practices also apply to purchasing authorities?

Yes, the prohibition of unfair trading practices also applies to purchasing authorities.

6. Does the ban on unfair trading practices also apply to consumers?

No, the prohibition of unfair trading practices only applies to commercial buyers and public authorities.

7. Does the prohibition of unfair trading practices also apply to foreign contracting parties?

Yes, the prohibition of unfair trading practices is already applicable if either the supplier or the buyer is based in the European Union.

8. Which trading practices are prohibited?

The following trading practices are always considered unfair and are prohibited in the relationship between large commercial and government buyers and smaller suppliers in terms of turnover:

  • Payment terms later than 30 days for perishable agricultural, fishery and food products or later than 60 days for other agricultural, fishery and food products,
  • Return of unsold agricultural, fishery and food products, without payment of the purchase price and disposal costs for products that can no longer be used,
  • Short-term cancellations for perishable agricultural, fishery and food products,
  • Participation of the supplier in storage costs of the buyer through payments or price discounts,
  • Unilateral changes to contractual conditions by the buyer, e.g. terms of delivery and payment, quality standards, prices, etc.,
  • Assumption by the supplier of costs incurred by the buyer due to quality reductions after delivery or due to the handling of customer complaints,
  • Assumption of costs by the supplier that have no specific connection with the sale of the contract goods,
  • Payments or price reductions for listing products following their market launch,
  • Threatening or taking retaliatory measures (e.g. discontinuation, reduction of order quantities or termination of agreed advertising for the contractual products) in the event that the supplier exercises his or her rights,
  • Refusal of the buyer to confirm a verbally concluded contract in text form,
  • Demanding price reductions as part of an agreed sales promotion by the buyer without providing the supplier with an estimate of the quantity to be ordered at the lower promotional price in text form in good time beforehand,
  • Refusal by the buyer to provide the supplier with an estimate of the payments or price reductions that have been agreed - e.g. for listing at market launch, for marketing or for setting up sales premises - or a cost estimate in text form,
  • Unauthorised or disloyal acquisition, use or disclosure of the Supplier's trade secrets.

Payments or price reductions by the supplier for:

  • the listing of agricultural, fishery and food products when they are launched on the market,
  • the marketing of the agricultural, fishery or food products supplied, including offers for sale, advertising, discounts in the context of sales promotions and making them available on the market,
  • setting up sales premises

are only permissible in the relationship between large commercial and official buyers and smaller suppliers if they have previously been agreed "clearly and unambiguously" between the parties. Contractual conditions are "clear and unambiguous" if they are understandable and do not contain any relevant room for interpretation. Such conditions can also be contained in general terms and conditions.

It is true that the aforementioned cost regulations can be agreed on in principle. However, this does not apply if there is no specific connection to the sale of the supplier's products. Thus, advertising cost allowances for the supplier's products can be agreed on in principle. However, an agreement regarding the payment of an advertising allowance even if the supplier's products are not advertised in the advertising material would be ineffective.

Moreover, an agreement on price reductions in connection with sales promotions is only effective if the buyer also undertakes to inform the supplier, in text form and in good time before the start of the sales promotion, of the promotion period and of an estimate of the quantity of products to be ordered at the lower price. If the buyer does not fulfil his contractual obligation to inform the supplier, he cannot claim the agreed price reduction.

9. Are contractual clauses and conduct not mentioned here always permitted?

No. The AgrarOLkG only prohibits the contractual clauses and practices explicitly and conclusively mentioned. Accordingly, contractual clauses and practices not listed there - e.g. requiring buyers to deliver at prices below the supplier's production costs or selling below cost price - are not subject to the prohibition of unfair trading practices.
This, however, does not mean that such contractual clauses and conduct are always permitted. Rather, under certain conditions, such contractual clauses and conduct may be prohibited under other laws, e.g. the prohibitions of abuse under antitrust law that apply to market-dominant or market-powerful companies (sections 19 et seq. of the Act against Restraints of Competition) or the provisions of the Act against Unfair Competition.
Other authorities - e.g. the Federal Cartel Office for the prohibitions of abuse under cartel law - are responsible for enforcing these prohibitions.

10. What applies if my contract contains unfair trading practices?

Unfair trading practices are prohibited by law.

The BLE can take up infringements on complaints from market participants, ex officio or on the basis of requests for administrative assistance from implementing authorities of other EU Member States and can issue the orders necessary to bring the infringement to an end and to prevent future infringements. In addition, the BLE can punish infringements by imposing fines.

Contracts containing prohibited unfair trading practices may be partially invalid. Large commercial and official buyers of agricultural, fishery and food products cannot then invoke such contract clauses against their smaller suppliers in terms of turnover. The civil courts decide on the validity of contracts.

11. My contract seems to be in order, but my buyer is not abiding by it. Does the prohibition of unfair trading practices apply even if the contract does not contain any prohibited clauses?

Yes, it is not the wording of the contract that is decisive, but the actual conduct of the buyer. Obligated buyers act unfairly even if the content of the contract is impeccable if they e.g.

  • fail to make payments owed (purchase prices or removal costs) or fail to make them on time (unless they have a right to refuse performance),
  • demand services (storage costs, payments or price reductions) to which they are not entitled in the absence of a valid agreement,
  • refuse to confirm verbally concluded delivery agreements in writing,
  • obtain, use or disclose any trade secrets without the consent of the Supplier; or
  • threaten retaliation against suppliers who exercise their contractual / legal rights.

12. I do not have a written contract with my buyer. What can I do?

You can demand that your buyer confirm the content of a verbally concluded supply agreement or a verbally concluded framework agreement in text form. The refusal to confirm orally concluded supply agreements in text form is also considered a violation of the prohibition of unfair trading practices.

13. What can I do if I am a supplier affected by unfair trading practices?

You may submit a complaint to the BLE. The same right to file a complaint is available, at your request, to associations you are a member of and, at your request, to organisations, which have a legitimate interest in representing you. Such organisations are, for instance, district farmers' associations with legal capacity and other producers' associations with legal capacity at Land or federal level.

Aside from the option of submitting a complaint to the BLE, suppliers affected by unfair trading practices can agree with the buyer to use alternative dispute resolution procedures, including recourse to an ombudsman's office.
In addition, the affected persons have recourse to civil law.

14. What do I state in a complaint to the BLE?

In order for us to investigate your complaint, please specify, which prohibited trading practices the buyer is alleged to have violated. It is also helpful if you provide us with your contact details so that we can address any queries to you and keep you informed about the status of your complaint.

15. Can the BLE protect my identity and confidential information from disclosure to my buyers?

Yes. We know that suppliers affected by unfair trading practices usually face buyers whom they depend on economically.

The BLE therefore protects the identity and any other information you believe would harm your interests if disclosed. The AgrarOLkG provides the necessary legal basis. You just need to tell us which information in your complaint we should treat confidentially.

If, in a particular case, we conclude that we will not be able to complete the investigation of your complaint without disclosing your confidential information, we will inform you accordingly. You can then decide whether to disclose your confidential information or not and how to proceed: If you agree to disclose the information, the procedure can continue; if not, we shall not proceed further.

16. Will a complaint to the BLE cost me anything?

No, the BLE records and processes your complaint free of charge.

17. Do I have to hire a lawyer to file a complaint with the BLE?

No, you do not have to hire a lawyer. In very complex cases, however it may be advisable to seek legal advice.

18. What does the BLE do with my complaint?

The BLE will check whether there has been a violation of the prohibition of unfair trading practices and whether it will initiate proceedings in this regard. The BLE will keep you informed about the status, progress and outcome of your complaint.

19. What can the BLE do against unfair trading practices?

If the BLE initiates proceedings, it may conduct further investigations to clarify the facts. If the BLE concludes that there has been a violation of the prohibition of unfair trading practices, it will issue appropriate orders to put an end to the violation and prevent future violations. It may also impose fines on buyers who have infringed the prohibition of unfair trading practices.

20. Whom can I contact if I have questions about unfair trading practices or if I want to complain?

If you have any questions or complaints regarding unfair trading practices, please contact the team of Unit 516:

Telephone: +49-228-6845-3606
Fax: +49-30-1810 6845-330
E-Mail: 516@ble.de

Federal Office of Agriculture and food - Unit 516 -
Deichmanns Aue 29
53179 Bonn
Germany

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