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Unfair trading in the food supply chain

On 13 June 2018, the EU Energy and Environment Sub-Committee considered the European Commission's proposed Directive tackling unfair trading practices in the food supply chain.

In 2016 the European Parliament called for legislation on unfair trading practices (UTPs) in the food supply chain. This was on the basis that such practices are widespread, and are particularly harmful to smaller operators. This resolution was supported by a stakeholder consultation carried out by the Commission in 2017.

The proposed Directive sets out a number of prohibited activities which address the concerns that have been raised, and covers small- and medium-sized enterprises (SMEs) throughout the food supply chain. However, the Government believes it is more appropriate to tackle unfair trading practices with targeted measures at a domestic level, and believes the cost of setting up the required enforcement body would be higher than indicated by the Commission.

The Committee has therefore written to the Minister asking for more detail on other Member States' views on the Proposal, what body the enforcement responsibility would fall to in the UK if the Directive were agreed, and what amendments, if any, would make the Proposal acceptable to the UK.

Update: on 11 July 2018, Members reviewed the response they had received from the Minister. They noted the Minister's view that there is not yet sufficient detail regarding the proposed enforcement role to assess what body it would fall to in the UK, and that the Directive would need to provide Member States with far more discretion to reflect their varied supply chains in order to be acceptable. The Committee asked for the Minister's view on whether such changes could be secured, and for further updates as negotiations progress. They also requested an assessment of the impact the Directive would have on the UK as a third country, and further clarity on whether proposals to extend the transposition period make it unlikely that the UK will be required to implement the Directive.

Update: on 12 September 2018, Members reviewed the response they had received from the Minister. They noted that the majority of Member States support the Proposal, which is not the view taken by the Government, and that the implementation deadline is likely to fall after the UK leaves the EU. In response, Members requested a view on the Proposal’s evidence base, an assessment of the potential impact on trade between the UK and the Republic of Ireland, and, when possible, detail on how it would be enforced in the UK.

Update: on 31 October 2018, Members reviewed the response they had received from the Minister. They requested updates regarding the scope and timing of the Proposal as negotiations progress, and sought assurance that the Parliamentary scrutiny reserve had not been breached.

Update: on 29 November 2018, Members reviewed the response they had received from the Minister. As negotiations appear to be reaching their final stages, they informed the Minister that in order to consider a request of a waiver that would allow him to vote in favour of the Proposal they would need more clarity on the final scope of the Proposal, how it would be enforced and whether it is likely to apply to the UK.

Update: on 12 December 2018, Members reviewed the response they had received from the Minister. They noted the Minister’s explanation that the UK is unlikely to have to implement the Proposal; but given the variables involved, it cannot be ruled out. The Minister was unable to satisfactorily explain the impact of the Proposal on the UK, or how it would be enforced. The Committee therefore decided to hold the Proposal under scrutiny, which in effect does not grant the Minister permission to vote in favour of it. They requested an update from the Minister after the AgriFish Council meeting.

Update: on 16 January 2019, Members reviewed the response they had received from the Minister. The letter stated that the vote that had been expected in December did not take place, but is now expected in late January, with several details having been clarified in the meantime. The Committee noted that the Minister had clarified the size of businesses affected by the Proposal, and to some extent the means by which the Directive would be enforced. However, he had not provided a view on whether the costs of the Directive would exceed the benefits to UK businesses, or an assessment of the potential enforcement costs to the UK. The Committee therefore decided again to hold the Proposal under scrutiny, not granting the Minister permission to vote in favour of it. They requested an update from the Minister after the Council vote. 

Update: on 6 March 2019 Members reviewed the response they had received from the Minister. As he was still unable to explain the impact of the proposed Directive on the UK, or how it would be enforced, and the Impact Assessment appears to be based on insufficient evidence, the Committee again decided to hold the Proposal under scrutiny. They also asked the Minister to explain what the Government would do if it were required to implement the Directive, what is being done to clarify the position of third-country trading partners, and how he would resolve conflicts between the Directive and existing UK legislation in this area.

Letters to the Minister

Letters from the Minister

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