Act on Combating Unfair Trading Practices in the Agricultural and Food Supply Chain1
Passed 14.09.2021
Chapter 1 General Provisions
§ 1. Scope of regulation and scope of application of the Act
(1) This Act sets out a transaction or act performed in economic or professional activities, the subject matter of which is agricultural and food products and which is considered a prohibited unfair trading practice for the purposes of this Act or which is acceptable where certain conditions are met, sets out such conditions, the grounds and rules of regulatory enforcement and administrative oversight of compliance with this Act as well as liability for violation of the requirements of the Act.
(2) The provisions of this Act aimed at unfair trading practices also apply to a service directly related to the sale of agricultural and food products, which are rendered to the seller of the products by the buyer.
(3) This Act applies to buyers and sellers of agricultural and food products established or residing in the European Union.
(4) This Act does not apply to a buyer who buys agricultural and food products for their own consumption.
(5) This Act applies to buyers and sellers of agricultural and food products regardless of the law governing the contract regulating their relationships.
(6) The provisions of the Administrative Procedure Act apply to the administrative proceedings specified in this Act, taking into account the variations provided for in this Act.
Chapter 2 Unfair Trading Practices in the Agricultural and Food Supply Chain
§ 2. Prohibition of unfair trading practices
(1) Unfair trading practices are prohibited.
(2) For the purposes of this Act, ‘unfair trading practice’ means a transaction or act performed in economic or professional activities, the subject matter of which is agricultural and food products and which is considered a prohibited or which is prohibited where the conditions set out in this Act are not met.
(3) Only an unfair trading practice set out in this Act is permitted, provided that the buyer and seller of the agricultural and food product conclude a clear and unambiguous agreement to that end in a form reproducible in writing (hereinafter conditionally prohibited unfair trading practice).
§ 3. Agricultural and food product and the duty to organise the performance of the duties of their buyers and sellers
(1) For the purposes of this Act, ‘agricultural and food product’ means a product listed in Annex I to the Treaty on the Functioning of the European Union as well as products not listed in that Annex but processed for use as food using products listed in that Annex.
(2) For the purposes of this Act, ‘buyer of agricultural and food products’ means a person who buys agricultural and food products, including a governmental authority or an authority administered by a governmental authority, a municipal authority or an agency administered by a municipal authority or an association of such agencies, a public legal person or an association of these persons.
(3) For the purposes of this Act, ‘seller’ means a person, including a producer or supplier organisation or an association thereof, who sells agricultural and food products to a person specified in subsection 2 of this section.
(4) The legal representative of a corporate buyer or seller of agricultural and food products organises the performance of the duties of the legal person under this Act.
§ 4. Unfair trading practice related to the payment period
(1) Where agricultural and food products are supplied on a regular basis under a contract of sale, an unfair trading practice according to which the payment period is more than 30 days after the end of the agreed delivery period or the date of setting the amount payable for the given delivery period, whichever of those two dates is the later, is prohibited.
(2) In the event specified in subsection 1 of this section, an unfair trading practice whereby the payment period is calculated on the basis of a delivery period exceeding one calendar month, regardless of the actual length of the agreed delivery period, is prohibited.
(3) Where the buyer sets the amount payable for the delivery period specified in subsection 1 of this section, the payment period starts to run from the end of the agreed delivery period in which the deliveries have been made.
(4) Where the contract of sale does not provide for the delivery of products on a regular basis, an unfair trading practice whereby the payment period is more than 30 days after the date of delivery or the date on which the amount payable for the delivery is set, whichever of those two dates is the later, is prohibited.
(5) Where the buyer sets the amount payable for the delivery specified in subsection 4 of this section, the payment period starts to run from the date of delivery.
(6) Subsections 1 and 4 of this section do not apply where:
1) the buyer makes a payment under school scheme aid in accordance with Article 23 of Regulation (EU) No 1308/2013 of the European Parliament and of the Council establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ L 347, 20.12.2013, pp 671–854);
2) the buyer is a health care services-providing public legal person who makes a payment in accordance with Article 4(4)(b) of Directive 2011/7/EU of the European Parliament and of the Council on combating late payment in commercial transactions (OJ L 48, 23.02.2011, pp 1–10);
3) the buyer makes the seller a payment for grapes or must used for wine production under a long-term contract concluded before 1 January 2019 and the terms of payment of the sales transactions of which are set out in accordance with Article 164 of Regulation (EU) No 1308/2013 of the European Parliament and of the Council.
(7) The time limits of deeming a payment obligation having fallen due, which are provided in § 821 of the Law of Obligations Act, do not apply to the payment periods set out in subsections 1 and 4 of this section.
(8) The prohibition set out in subsections 1 and 4 of this section does not preclude the buyer and seller from agreeing on value-sharing for the purposes of Article 172a of Regulation (EU) No 1308/2013 of the European Parliament and of the Council.
(9) A transaction or a condition thereof that is in conflict with the prohibition set out in this section is void.
§ 5. Unfair trading practice related to supply
(1) The buyer is prohibited from requiring the seller to make a payment not related to the sale of the seller’s agricultural and food product.
(2) The buyer is prohibited from requiring the seller to pay for the deterioration or loss of agricultural and food products, where such deterioration or loss is not caused by the fault of the seller, and:
1) the deterioration or loss occurs on the buyer’s premises, or
2) the deterioration or loss occurs after ownership of the agricultural and food product has been transferred to the buyer.
(3) The buyer is prohibited from refusing to buy agricultural and food products the buying of which constitutes the buyer’s contractual obligation at such short notice that the seller cannot reasonably be expected to find an alternative means of commercialising or using that product.
(4) The buyer is prohibited from unilaterally changing the terms of a contract of sale of agricultural and food products that concern the frequency, method, place, timing or volume of the supply or delivery of the products, the quality standards, the terms of payment or the prices, or as regards a service directly related to the sale of the agricultural and food products, which is provided by the buyer.
(5) The buyer is prohibited from refusing to issue a written confirmation for the purposes of subsection 1 of § 32 of the Law of Obligations Act regarding the terms of the contract of sale of agricultural and food products concluded with the seller, where the seller has asked the buyer for a written confirmation.
(6) Subsection 5 of this section does not apply where the buyer is a commercial association or a non-profit association and the transaction involves agricultural and food products which the seller sells to a commercial association or non-profit association of which the seller is a member, provided that the articles of association of the commercial association or non-profit association contain provisions having effects similar to those of a contract of sale.
(7) The buyer is prohibited from unlawfully acquiring, using or disclosing the trade secrets of the seller for the purposes of § 5 of the Restriction of Unfair Competition and Protection of Business Secrets Act.
(8) The buyer is prohibited from threatening the seller with carrying out acts of commercial retaliation against the seller if the seller exercises its contractual or statutory rights, including by filing an application regarding an unfair trading practice with the Competition Authority or by cooperating with the Competition Authority during an investigation.
(9) The buyer is prohibited from requiring compensation from the seller for the cost of examining customer complaints relating to the sale of agricultural and food products despite the absence of fault on the part of the seller.
(10) A transaction or a condition thereof that is in conflict with the prohibition set out in this section is void.
(11) The buyer’s unresponsiveness or failure to act is also deemed refusal to issue a written confirmation specified in subsection 5 of this section.
§ 6. Conditionally prohibited unfair trading practice
(1) Where the buyer and seller of an agricultural and food product have not agreed in clear and unambiguous terms of supply in a form reproducible in writing, the buyer of the agricultural and food product is prohibited from:
1) returning unsold agricultural and food products to the seller without paying for those unsold products or without paying for the disposal of those products;
2) charging the seller payment as a condition for stocking, displaying or listing its agricultural and food products, or of making such products available on the market;
3) requiring the seller to bear all or part of the cost of any discounts on agricultural and food products that are sold by the buyer as part of a promotion;
4) requiring the seller to pay for the advertising by the buyer of agricultural and food products;
5) requiring the seller to pay for the marketing by the buyer of agricultural and food products;
6) charging the seller for staff for fitting-out premises used for the sale of the seller's agricultural and food products;
7) demanding that the seller use transportation packaging of only a certain type, shape and size, unless otherwise provided in legislation regulating the handling of the agricultural and food products.
(2) Where the buyer and seller of agricultural and food products have agreed on using an unfair trading practice specified in clause 3 of subsection 1 of this section, the buyer, prior to a promotion that is initiated by the buyer, specifies the period of the promotion and the expected quantity of the agricultural and food products to be ordered at the discounted price.
(3) Where the buyer and seller of agricultural and food products have agreed on making a payment specified in clauses 2–6 of subsection 1 of this section and the seller submits a respective request to the buyer, the buyer provides the seller with an estimate in a form reproducible in writing of the payments per unit or the overall payments.
(4) Where the buyer and seller of agricultural and food products have agreed on making a payment specified in clauses 2 and 4–6 of subsection 1 of this section and the buyer submits a respective request to the seller, the buyer, in addition to the information specified in subsection 3, provides in a form reproducible in writing an estimate of the cost to the seller and the basis for that estimate.
(5) Where a conditionally prohibited unfair trading practice set out in subsection 1 of this section is used without a proper agreement, the transaction or condition thereof is void.
(6) Failure to submit the information specified in subsections 2–4 of this section results in the voidness of the agreement specified in these subsections.
(7) In the case of the transaction conditions specified in subsections 2–4 of this section, it is deemed that the agreement is concluded solely by agreement of the parties. The seller’s non-responsiveness or failure to act is deemed acceptance of the transaction conditions specified in subsections 2–4 of this section.
Chapter 3 Regulatory Enforcement and Administrative Oversight
§ 7. Organisation of regulatory enforcement and administrative oversight
(1) The Competition Authority carries out regulatory enforcement and administrative oversight of compliance with this Act.
(2) The Competition Authority may, for the purpose of the regulatory enforcement provided in this Act, take special measures of regulatory enforcement provided in §§ 30–32 and 49–51 of the Law Enforcement Act on the grounds and in accordance with the procedure set out in the same Act.
§ 8. Compliance notice in the event of a risk of an unfair trading practice
(1) In the case of urgency, the Competition Authority may by a compliance notice impose on the buyer or seller the duty to perform an act or refrain from performing an act if to the knowledge of the Competition Authority there is a risk of serious and irreparable harm due to a violation of the prohibition provided in §§ 4–6 of this Act.
(2) The compliance notice specified in subsection 1 of this section is valid only for as long as it is indispensable for averting the risk.
§ 9. Rate of non-compliance levy
In the event of failure to comply with a compliance notice, the maximum rate of the non-compliance levy imposed in accordance with the rules provided for in the Substitutional Performance and Non-compliance Levies Act is 600 euros for an individual and 100,000 euros for a legal person.
§ 10. Application
(1) An application for the commencement of regulatory enforcement or administrative oversight of an unfair trading practice may be submitted to the Competition Authority by:
1) a seller;
2) a producer organisation or commercial association in the name of its member;
3) a seller organisation;
4) an association of the organisations specified in clause 2 or 3 of this subsection in the name of its member or in the name of a member of a member of the association of the organisations;
5) another organisation that operates as a non-profit association and has a legitimate interest in representing a seller.
(2) An application submitted to the Competition Authority is written and sets out the data specified in subsection 3 of § 14 of the Administrative Procedure Act.
(3) On the basis of the applicant’s justified application, the Competition Authority may decide not to disclose the name and other information of the applicant to the other person.
(4) The non-disclosable information specified in subsection 3 of this section is omitted from the text of decisions and compliance notices that are subject to publication.
§ 11. Refusal to hear an application
The Competition Authority refuses to hear an application submitted for the purpose of commencement of regulatory enforcement or administrative oversight of an unfair trading practice where:
1) the application is clearly not justified;
2) the hearing of the application is not within the Competition Authority’s competency;
3) the applicant cannot be identified based on the information given in the application;
4) the applicant does not comply with subsection 1 of § 10 of this Act.
§ 12. Termination of the proceedings
The Competition Authority may terminate the hearing of an application for the commencement of regulatory enforcement or administrative oversight of an unfair trading practice where:
1) there are no elements of violation of this Act in the activities of the buyer;
2) misdemeanour proceedings have been instituted regarding the same matter;
3) the applicant has withdrawn their application and termination of the proceedings does not harm third party rights;
4) the same matter is being heard by another Member State’s enforcement authority or another Member State’s enforcement authority has made a decision in the same matter;
5) the buyer has stopped the activity constituting the subject matter of the proceedings and there is no need for a compliance notice;
6) the applicant has noted in the application that the applicant’s name and other information specified in subsection 3 of § 10 of this Act is not subject to disclosure to another person, but the information may be given in a decision made as a result of the proceedings.
§ 13. Cooperation in the European Union
(1) For the purpose of combating unfair trading practices, the Competition Authority cooperates with the authorities designated by the Member States of the European Union to combat unfair trading practices and with the European Commission.
(2) The Competition Authority publishes on its website, in the form of a report, information on regulatory enforcement and administrative oversight of unfair trading practices initiated and completed in the preceding year, taking subsection 4 of § 10 of this Act into account. The information contains a summary of the substance and results of the proceedings and of the decisions made.
(3) By March 15 each year, the Competition Authority submits to the European Commission a report on the application of the requirements of this Act and ensuring compliance therewith.
Chapter 4 Liability
§ 14. Violation of the prohibition of unfair trading practices
(1) The penalty for a violation of the prohibition of unfair trading practices related to a payment period or supply as well as for using conditionally prohibited unfair trading practices without a proper agreement is a fine of up to 300 fine units or a short-term custodial sentence.
(2) The penalty for the same act committed by a legal person is a fine of up to 400,000 euros.
§ 15. Proceedings
(1) The limitation period of the misdemeanours specified in this Act is three years.
(2) The Competition Authority is the out-of-court proceedings authority in the misdemeanour cases provided for in this Act.
Chapter 5 Implementing Provisions and Follow-up Evaluation
§ 16. Bringing a non-compliant contract into compliance with the Act
(1) A contract of sale of agricultural and food products concluded before the entry into force of this Act is brought into compliance with this Act within 12 months after the publication of the Act in the Riigi Teataja. A contract of sale which has not been brought into compliance with this Act or a condition thereof, which is in conflict with this Act, is void.
(2) Where a buyer wishes to bring a contract specified in subsection 1 of this section into compliance with this Act, the buyer makes the seller a proposal to amend the contract and gives the seller a reasonable time limit for accepting or refusing the proposal. Where the seller does not communicate its decision within the time limit, the contract is deemed amended.
(3) Where the seller refuses to amend the contract, the buyer has the right to terminate the contract concluded with the seller.
(4) Where a contract specified in subsection 1 of this section has not been concluded in writing, the buyer submits to the seller a written confirmation and gives a reasonable time limit for accepting or rejecting it. Where the seller does not communicate within the time limit that the seller rejects the terms contained in the written confirmation, these are deemed the contract terms.
(5) The duty, time limit and consequence specified in subsection 1 of this section apply to the articles of association of a commercial association or non-profit association that is a buyer of agricultural and food products or to a resolution made on the basis thereof, which, regarding a seller that is a member of such association, contains provisions that are in conflict with this Act.
§ 17. Follow-up evaluation of the Act
The Ministry of Rural Affairs analyses the impact and effectiveness of implementation of this Act by 31 December 2025.
§ 18. [Omitted from this text.]
§ 19. Entry into force of the Act
This Act enters into force on 1 November 2021.
1 Directive (EU) 2019/633 of the European Parliament and of the Council on unfair trading practices in business-to-business relationships in the agricultural and food supply chain (OJ L 111, 25.04.2019, pp 59–72).
Jüri Ratas
President of the Riigikogu
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