Charlie McConalogue (Donegal, Fianna Fail)
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170. To ask the Minister for Agriculture, Food and the Marine his views on the joint statement by a group of European farming and food organisations (details supplied) calling for all participants in the food supply chain to be protected from unfair trading practices regarding EU proposals on unfair trading practices. [39358/18]

Michael Creed (Cork North West, Fine Gael)
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The draft Directive on Unfair Trading Practices proposes the prohibition of certain Unfair Trading Practices (UTPs) which occur in relation to the sales of food products in the food supply chain across the EU:

- by an SME supplier, including farmers

- to a buyer, that is a large entity, i.e. larger than an SME.

The EU definition of SME is : "Enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding €50 million, and/or an annual balance sheet total not exceeding €43 million."

The legal basis on which the Directive is based is Article 43(2) of the TFEU (Common Agricultural Policy) which allows for the Council to establish the Common market for Agriculture and Fisheries to pursue the objective of Article 39(b), which ‘is to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture’. The Directive is therefore seeking to contribute to ensuring a fair standard of living for those producers who are particularly vulnerable to UTPs, who have the least bargaining power, and are least able to address UTPs without negative effects on their economic viability, particularly as agricultural products are perishable and seasonable, and subject to adverse weather conditions.

The issue of the scope of the proposed Directive in terms of the size of the entities concerned has been a key issue for debate at the working groups and the Special Agriculture Committee. Some Member States have suggested that, rather than being confined to small sellers and large buyers, the scope should be extended to also provide protection to large sellers, and that the Directive should also apply to small SME buyers.

However, the Council and Commission Legal Services have both advised that the legal basis of Art 43.2 of the EU Treaty, which is being used for the proposed Directive, would be open to a legal challenge if the scope of the Directive is extended. It is on the basis of this legal advice that Ireland, while recognising the desirability of extending the scope of the Directive to address the issue of unfair practices irrespective of the size of the entity, acknowledged at the recent SCA meetings the concerns of the legal services about the legal basis for further extending the scope. Ireland also recognised the possibility, set out in Article 8 of the draft Directive, for Member States to lay down or maintain stricter rules, to extend the scope to other types of buyers and suppliers and to prohibit other UTPs in national legislation.