1. Supply and retail operators to face tighter scrutiny
On 12 July 2017, a new act on counteracting the unfair use of
contractual advantage in trade in agricultural and food products
(the "Act") will enter into force in
Poland. The Act aims to protect food suppliers and distributors,
i.e. small farmers and groceries, against abuse of power by large
supermarkets and food chains. The government argues that the
practices of these large distributors harm suppliers and may
encourage them to use cheap quality products, thus putting the
safety of the food industry and consumers at risk.
2. Contractual advantage
The Act prohibits the use of unfair contractual advantage, i.e.
a significant disproportion in the economic potential of the
parties where the weaker party does not have sufficient opportunity
to sell or purchase agricultural products and groceries. The use of
contractual advantage is unfair if it is contrary to good habits
and threatens or violates the material interests of the other
Here are some examples of unfair use of contractual
unjustified termination of an
agreement or the threat of such termination;
arrangements whereby only one party
has the right to terminate an agreement;
making the conclusion of an agreement
conditional on acceptance or performance by a party to another
transaction with no material or customary relevance to the subject
of the agreement (e.g. additional fees for putting the products on
unjustified extension of payment
The Act is only applicable to agreements between parties where
the total, mutual turnover between the parties in the year in which
the proceedings were initiated or during any of the two preceding
years exceeded PLN 50,000 (approx. EUR 13,000) and where the
turnover of the supplier or purchaser that applied the questionable
practices exceeded PLN 100,000,000 (approx. EUR 25,000,000) in the
year preceding the year in which the proceedings were initiated. As
these thresholds are relatively low, the new Act will apply to most
businesses in the agricultural and food sector.
3. Proceedings and penalties
The President of the Office for Competition and Consumer
Protection (the "POCCP") is responsible
for handling cases of unfair use of contractual advantage. The
procedure is generally based on the Act of 16 February 2007 on
Competition and Consumer Protection and on administrative law. The
proceedings are initiated by the POCCP ex officio, not at
the request of any party.
Nevertheless, entrepreneurs with a reasonable suspicion that
they are being subjected to unfair practices may submit a written
complaint to the POCCP.
If at the end of the proceedings the POCCP ascertains that abuse
of contractual advantage occurred, it will order the practices to
be ceased. In addition, the POCCP may impose a fine of up to 3 % of
the annual turnover in the financial year prior to the year when
the fine was imposed, if a party, even unintentionally, used
contractual advantage unfairly.
Additional fines may be imposed for obstructing proceedings or
providing misleading information to the POCCP. For example, a fine
of up to the equivalent of EUR 50,000,000 may be imposed for
evading or obstructing the inspection or for providing false or
misleading information, and a fine of up to the equivalent of EUR
10,000 may be imposed for each day of delay in executing the
POCCP's decision. The POCCP may also impose fines on persons in
managerial positions or members of management boards in the amount
of up to 50 times the average salary in the last month of the
preceding quarter (currently PLN 231,751, approx. EUR 53,320) for
the above-mentioned actions.
If the entity voluntarily undertakes to refrain from unlawful
practices or to remedy the consequences, the POCCP may issue a
decision obliging the entity to comply with its undertakings. In
such a case no fine will be imposed.
Paradoxically, the effect of the Act may not prove beneficial
for small farmers and groceries. This is because the imprecise
terms used in the Act give the POCCP broad room to interpret the
actions taken by food suppliers and retail chains. Such legal
uncertainty, as well as the threat of harsh penalties by the POCCP,
may cause large distributors to seek new suppliers in other
countries to avoid the risk of breaching the Act.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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6502 sayılı Tu keticinin Korunması Hakkında Kanun ("TKHK"), Avrupa Birlig i ile yapılan mu zakereler çerçevesinde 25 Mayıs 1999 tarihli Tu ketici Malları Satım So zleşmeleri ve İ lgili Garantilerin Bazı Yo nleri Hakkında 1999/44/AT sayılı Avrupa Parlamentosu ve Konseyi Yo nergesinin iç hukuka aktarımını gerçekleştirmek amacıyla 28.05.2014 tarihinde yu ru rlu g e girmiştir. Bu kanunun 8'inci ve 12
On November 22nd, 2016, the French Supreme Court ruled that oral allegations prevail over contractual omission for the determination of the existence, or non-existence, of misleading commercial practices.
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