The rules prohibiting restrictive practices in the agricultural and food supply chain have been reinforced with the entry into force of Decree-Law No. 76/2021, of August 27.

Among the main changes, the prohibition of stipulating payment terms in contracts for the sale or supply of food intended for human consumption exceeding 30 days (except when the buyer is a company in the catering and beverage sector) or 60 days (for non-perishable products) is highlighted, depending on the turnover of the supplier and the buyer.

These payment terms apply to suppliers in the agri-food sector, producer organizations and their associations, as well as buyers of agricultural and food products or their associations, regardless of the European Union Member State.

In commercial transactions involving agricultural or food products, the following practices are also prohibited:

a. Notifying the cancellation of orders for perishable products less than 30 days before the scheduled delivery date [perishable products being understood as those likely to become unfit for sale within 30 days after harvest, production, or processing];

b. Unilateral modification of the contract concerning the frequency, method, place, schedule, or volume of supply or delivery, as well as quality standards, prices, and payment conditions;

c. Imposing payments, directly or indirectly, in the form of discounts: (i) unrelated to the sale of the supplier’s agricultural or food products; (ii) for the deterioration, loss, or waste of the supplier’s products occurring on the buyer’s premises;

d. Rejection or return of delivered products, based on lower quality of part or all of the order or delivery delay;

e. Refusal to confirm in writing the terms of an agreement when expressly requested by the supplier.

The following practices are also prohibited unless they have been clearly and unequivocally stipulated in the supply agreement or a subsequent agreement between the supplier and the buyer:

– The return of unsold products by the buyer without payment for these products;

– Charging the supplier a fee as a condition for the storage, display, or inclusion in the inventory of their products, or for the availability of products on the market;

– Requiring the supplier to bear all or part of the cost of discounts on products sold by the buyer as part of a promotion;

– Requiring payment from the supplier for advertising their products or for marketing actions carried out by the buyer;

– Charging the supplier for the remuneration due to the personnel for maintaining the facilities used to sell the supplier’s products.

Moreover, rules regarding the reporting and investigation of prohibited restrictive practices are defined. A complaint can be filed with the supervisory authority of the Member State where the supplier or the suspected buyer is established (in the case of Portugal, the ASAE – Food and Economic Safety Authority), which is responsible for following up on the complaint and the subsequent processing of the case.

The European Commission published a report in April 2024 to assess the implementation of the Directive on unfair trading practices. Companies that answered to the questionnaire identified as the main issue the lack of awareness of these rules. Additionally, when the interviewees were asked why they did not report an unfair trading practice suffered, respondents indicated fear of retaliation by the buyer considering it a common practice in the sector and expressing a lack of confidence in a timely response from the competent authorities.

In the future, the European Commission intends to strengthen the Directive on unfair trading practices by creating:

– An EU Agri-Food Chain Observatory (AFCO) to increase transparency regarding prices, cost structures, and the distribution of margins and added value in the supply chain.

– A Common Organization of Agricultural Markets (CMO) that will include new rules on contracts between farmers and buyers, strengthening the position of producer organizations to act collectively more effectively.

– in Portugal is at your disposal to review supply, purchase, and sale agreements of food products and proceed with the necessary adjustments.