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Dear clients and cooperation partners,
We are pleased to present this Food, Agriculture & Forestry newsflash focusing on the most recent issues and regulation changes related to this sector.
The following headline topics are covered:
Proposed new version of the Law on Prohibition of Unfair Practices by Retailers aims to balance the interests of retailers and suppliers
The Lithuanian Government has submitted to the Parliament a new version of the Law on Prohibition of Unfair Practices by Retailers. The proposed amendments, which are a result of observations by the Competition Council, aim to balance the interests of retailers and suppliers (most of which are food product manufacturers and distributors).
The amendments propose to decrease the administrative burden on retailers by suggesting that market monitoring should only take place every two years, and at the same time to protect suppliers from pressure by retailers related to prices and conditions applied to third parties. Another important change would be the possibility for the Competition Council to conceal the identity of persons (suppliers) that file complaints about activities by retailers provided a clearly justified request is submitted.
The Law on Prohibition of Unfair Practices by Retailers passed in 2010 applies to retail companies having a large portion of the retail market where food products dominate. However, the law is relevant to suppliers that supply or intend to supply their products to the market players mentioned above.
Competition Council 2015 report discusses unfair practices
On 2 March 2015 the Competition Council issued its 4th report on monitoring the Law on Prohibition of Unfair Practices by Retailers. The observations and findings of the Competition Council serve as a deterrent from unlawful practices. The report overviews the latest developments in retailer and supplier relations, provides analysis of violations, and reports on opinion surveys related to enforcement of the Law.
From reported violations this year, practices by a few large retail chains have been addressed. These companies have been found to violate the prohibition on setting a requirement for suppliers to accept unsold food products. The conclusion was that by entering into agreements with food suppliers one of the retail chains unlawfully insisted on a provision that allowed it without restriction to return food products and drinks, and suppliers were obligated to accept them. The Competition Council concluded that retailers disproportionately transferred to suppliers the risk and losses related to sales of goods already delivered. After appeal, the decision of the Competition Council was upheld by the administrative court.
The full report can be found here.
Businesses operating in the food sector to follow stricter labelling and packaging requirements
From 13 December 2014, labelling and packaging must meet the requirements of a new EU Regulation. The purpose of the new EU-wide Regulation on food labelling is to provide consumers with sufficient information on food products and to facilitate free movement of food products.
The following new food labelling requirements have been set, among others:
- first, a convenient list of mandatory particulars has been set out;
- stricter legibility criteria for food labelling (minimum font size for mandatory information, significant contrast between print and background);
- mandatory indication of the country or place of origin for fresh pork, lamb, beef and poultry;
- mandatory indications about added water in meat and fishery products if added water exceeds 5% of the finished product;
- stricter requirements for labelling frozen products;
- identical labelling requirements for distance selling.
The Regulation applies to food businesses throughout the entire food chain if their operations are related to informing consumers about food products. It applies to all food products intended for end-users, including food products supplied by catering institutions and meant for delivery to catering institutions.
Ecological farming and transition to ecological farming to be eligible for financing from EU funds
Rules on the implementation of the 2014-2020 “Ecological Farming” rural development programme were adopted on 20 April 2015. Under the programme, transition to ecological farming as well as ecological farming itself qualifies for funding from EU funds. Funding may be granted to farmers and legal persons who throughout their tenure carry out (or are going to carry out immediately after receiving funding) activity related to ecological farming. Funding is also available to farmers and legal persons who carry out the same activity, not throughout their whole tenure but who undertake to do so from 2016.
The rules set out the following priorities and goals:
- restoration, preservation and improvement of ecosystems related to agriculture;
- prevention of soil erosion, preservation and improvement of soil quality;
- restoration, preservation and increase of biological diversity;
- protection of soil from degradation and loss of carbon dioxide;
- production of quality food products and supply of those products to consumers;
- decrease of agriculture-related environmental pollution.
The rules are available here.
Changes to Regulations on milk purchase will allow sale of milk to producers from other EU Member States
On 31 March 2015 changes to the Regulations on milk purchase were introduced. The changes are related to elimination of milk production quotas. The amendments allow milk producers to sell milk for processing to undertakings registered not only in Lithuania but also to undertakings registered in other member states of the European Union.
However, the requirements applicable to milk producers have not changed. As before, producers may sell for processing or directly for consumption only milk or milk products originating from dairies registered in their name. Milk producers who wish to purchase milk for processing from other milk producers must first receive veterinary confirmation from the State Food and Veterinary Service and register as purchasers at the Centre of Agricultural Information and Rural Activities.
Elimination of milk production quotas has been met with different reactions throughout the EU. Increase in milk production is likely to lower the purchase price of milk. In turn, this is likely to endanger smaller producers. Only those who manage to produce milk at the lowest cost possible will be able to survive. Thus, the reform is seen as a great danger for small farmers. Moreover, Lithuania is one of those countries whose milk producers will suffer the most. Consumers, on the other hand, may benefit the most, as overproduction of milk may lower prices. |
