What’s new in the agri-food sector since 1 November 2021

As a reminder, Order No. 2021-859 of 30 June 2021 [1] (hereinafter the “Order“) transposed into French domestic law Directive (EU) 2019/633 of 17 April 2019, the objective of which is to harmonise the European framework for fighting unfair commercial practices between professionals in the agri-food sector.

Supplemented by a decree of 31 August 2021 [2], all these new provisions came into force on 1 November 2021 for contracts concluded after the publication of the Order (i.e. 1 July 2021).  Contracts in force on 1 July 2021 will have to be brought into conformity before 1 July 2022.

Important measures, applicable exclusively to the agri-food sector, are thus introduced:

1.            New restrictive competition practices. – The Order adds three new illegal practices [3], punishable by an administrative fine of up to 75,000 euros for a natural person and 375,000 euros for a legal person:

• The prohibition for any buyer of perishable agricultural and food products to cancel an order within a period of less than thirty days. It should be noted that this period may however be reduced for a sector of activity, a category of purchasers, a product or a category of products, when the reduction provided for leaves sufficient time for suppliers to sell their products through another purchaser or to use them themselves.

The decree published last August sets out the terms under which the time limits for cancelling an order may be reduced, specifying that the minimum cancellation period applicable (i) to wholesalers would be twenty-four hours and (ii) for fresh fruit and vegetables three days, unless they are intended to be sold under a private label, in which case this minimum period is set at six days;

• A prohibition on a buyer of agricultural and food products from unlawfully obtaining, using or disclosing business secrets;

• A prohibition on any person engaged in production, processing, distribution or services to refuse to comply with a request by either party to confirm in writing the terms of an unwritten contract relating to agricultural and food products.

2.            Reduction of the maximum payment periods. – The Order modifies, for the benefit of suppliers of agricultural and food products, some payment term limits [4] (without preventing the parties from derogating contractually by shorter periods):

• For perishable foodstuffs, except in the case of periodic invoicing for which the maximum payment period will be thirty days after the end of the delivery decade, the payment period is reduced to thirty days after the delivery date;

• Purchases of wine will henceforth be subject to a period of sixty days from the date of issue of the invoice and those of grapes and musts intended for the production of wine to a maximum period of thirty days after the end of the ten-day delivery period, unless an exemption is provided for in the standard multi-annual contracts between suppliers of grapes or musts and their direct purchasers;

• For seasonal products in the fruit and vegetable sector, the payment period is no longer that of ordinary law but now benefits from a derogatory term limit of thirty days from the end of the month during which the delivery is made;

• Finally, for non-perishable agricultural and food products, the maximum period will be sixty days after the date of issue of the invoice, this period starting from the date of delivery when the invoice is issued by the buyer.

1. Supervision of the granting of promotional advantages to consumers. – The Order now provides that when the supplier undertakes to grant consumers promotional advantages on its products or services, the conditions for granting these advantages must be the subject of mandates entrusted to the distributor in accordance with the provisions of Article L. 441-4 VII of the French Commercial Code, thus specifying the amount, the nature, the period of granting and the terms and conditions for implementing these advantages as well as the terms and conditions of reporting by the distributor to the supplier.

By Corinne Khayat and Ophélie Sommé for the UGGC Avocats Competition department.

[1] Order No. 2021-859 of 30 June 2021 on unfair commercial practices in business-to-business relations within the agricultural and food supply chain.

[2] Decree No. 2021-1137 of 31 August 2021 setting the terms and conditions according to which the time limits for cancelling an order may be reduced under the conditions provided for in Article L. 443-5 of the Commercial Code.

[3] Articles L. 443-5 to L.443-7 of the Commercial Code.

[4] Article L. 411-11, II-1° of the Commercial Code.