The Austrian Federal Competition Authority publishes the final report of its food sector inquiry

UNFAIR TRADING PRACTICES

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At the beginning of November 2023, the Austrian Federal Competition Authority (BWB) presented the results of a one-year comprehensive sector inquiry into the food industry. The study was launched against the backdrop of significant price increases for consumers, global and European developments in the supply chain and rising inflation.

The BWB's analysis has pointed to several competition weaknesses, including a significant number of reported unfair trading practices against food suppliers, such as:

  • unilateral changes to contracts;
  • Payments unrelated to deliveries;
  • and payments for loss of quality not attributable to the supplier.

The BWB has also identified weaknesses in the EU single market in terms of growing profit margins in some product groups of internationally active manufacturers, while other product groups have seen a huge decline in their profit margins.

The report also highlights the increasing concentration in the agricultural and agricultural input markets, with the number of farms falling by 21% compared to 2010.

The BWB therefore recommends, among other things:

  • Improving the transparency of food
  • Upgrading and strengthening consumer protection
  • No misleading discounts
  • Market studies based on the FWBG
  • Legal certainty for suppliers through written form
  • No pressure to agree to practices in Annex II to the FWBG
  • Improved legal basis for the enforcement of competition law measures based on industry investigations.

Protection of farmers and small operators in the food sector

Some large players in the agri-food supply chain, who have considerable bargaining power with their suppliers, may be tempted to abuse their position to impose unfair trading practices.

In order to better protect farmers and small businesses, the law prohibits certain unfair trading practices between suppliers and buyers of agri-food products and lists certain practices that are only permitted if they have been "clearly and unambiguously" agreed between the parties beforehand.

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