Following an examination by the Competition Protection Agency regarding unfair trading practices in the food supply chain (for further information please see "Unfair trading practices in food supply chain examined"), the government drafted a proposal to amend and supplement the Agriculture Act.(1) The proposal contained some major changes to the food supply sector. Parliament accepted the proposal on March 22 2018.
The previous definition of 'unfair trading practices' in the food supply chain included a general clause stipulating that trading practices are unfair when they are imposed by a contracting party with significant market power (evident from the volume or values of sales) on another party contrary to good business practices. This was followed by several examples of prohibited practices and a provision that the part of an agreement establishing unfair practices will be considered null and void.
In line with the agency's call for a more precise definition of 'significant market power' and more transparent regulation of unfair practices, the amendment establishes the legal assumption of significant market power, pursuant to which a company on the purchasing side that has turnover of €25 million in Slovenia in the preceding business year has significant market power.
The amendment also provides a more extensive list of unfair trading practices, including 23 examples. As stated in the proposal, these examples do not establish new types of unfair practice; rather, they present a more precise list of examples derived from the general clause.
Another important change is the obligation that agreements between two parties that exceed €15,000 in one business year must be concluded in writing. The required content is defined as well. The agreement must therefore contain provisions on the price, quantity of goods, duration, payment deadlines, delivery method and rules applicable in the event of force majeure or price changes.
The amendment establishes mandatory supervision by the management and supervisory body which cannot be transferred to another responsible person.
Finally, the amendment envisages changes in the fines for offences and responsible persons. The first is linked to the percentage (ie, up to 0.25%) of a company's annual turnover generated in Slovenia in the preceding business year. Further, the fine imposed on the responsible person in the company is now between €5,000 and €10,000.
Parliament accepted the amendment on March 22 2018 and it will enter into force on April 19 2018. Nevertheless, all the changes in relation to the food supply chain (with the exception of fines) will apply from January 1 2019.
For further information on this topic please contact Urša Kranjc at Schoenherr Slovenia by telephone (+386 1 200 09 80) or email ([email protected]). The Schoenherr website can be accessed at www.schoenherr.eu.
Endnotes
(1) Zakon o kmetijstvu (Official Gazette RS 45/08, 57/12, 90/12 – ZdZPVHVVR, 26/14, 32/15 in 27/17).
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