Navigating Unfair Trading Practices: A Framework for Stronger Supply Chain Relationships

As regulatory scrutiny intensifies across the agri-food supply chain, buyers are under increasing pressure to ensure their trading practices are fair, transparent, and sustainable.  

The EU Unfair Trading Practices (UTP) Directive was introduced to help address longstanding imbalances by protecting smaller suppliers through the enforcement of clear obligations on buyers. But more than just a compliance obligation, the Directive offers a foundation for building long-term, mutually beneficial trading relationships that benefit everyone in the supply chain.

In this blog, I’ll provide a practical overview of the legislation, the responsibilities it introduces, and how both buyers and suppliers can use it to promote sustainable, collaborative partnerships.

Scope and Applicability

The legislation sets a baseline by introducing minimum requirements across all EU Member States. However, individual countries are permitted to go further and implement stricter rules if they choose. This means that businesses trading across borders must understand not just the EU-wide framework, but also how it might have been expanded in each jurisdiction.

It also applies to trading relationships where only one of the trading partners—either the buyer or the supplier—is based in the EU. Agri-food companies outside the EU who are buying from or selling to EU-based businesses must therefore take notice and ensure they understand the requirements.

The Directive contains various turnover tiers that determine which supplier-buyer relationships fall within scope. Suppliers with an annual turnover of up to €350 million may be protected under the legislation, depending on the size of the buyer they are trading with. Companies should take time to assess how they fit into this structure and identify which of their trading relationships are affected.

It’s also important to recognise that a single business may play different roles across its supply chain. A company might simultaneously be a supplier protected by the regulations in one relationship, and a buyer responsible for upholding fair-trading practices in another.

Why Awareness Still Matters

Despite the Directive having been in place for several years, a recent EU-wide survey found that 30% of agri-food suppliers remain unaware of the legislation—and therefore do not know what protections exist for them.  

This lack of awareness increases the risk of suppliers being treated unfairly or missing opportunities to assert their rights.

At the same time, the survey also reveals that many within the industry do not yet perceive the legislation as fully effective. A significant proportion of respondents reported that unfair practices targeted by the Directive still occur in more than 20% of their transactions. And while five years of survey data show that overall progress has been made—with a reduction in unfair practices across the board—the continued presence of non-compliance suggests that enforcement and scrutiny will remain a regulatory priority for years to come.

In this context, both buyers and suppliers benefit from understanding the rules: buyers to avoid penalties and reputational damage, and suppliers to be empowered in protecting their interests and promoting fair, sustainable dealings.

Black and Grey Lists: Key Rules to Understand

At the heart of the Directive is a list of trading practices that are considered unfair within the agri-food supply chain. These are split into two categories:

• Black list: Always prohibited, regardless of circumstances.

• Grey list: Allowed only if agreed upon in advance in a transparent, unambiguous manner.

While the grey list practices may be legitimate under the right conditions, the Directive recognises that they can become abusive when imposed without consent, as they may exploit imbalances of power in trading relationships.

The Black List: Four Key Compliance Areas

To help businesses understand the prohibited practices, I’ve grouped the 10 black list items into four practical categories:

Timing and completeness of payments for goods purchased

1. Late payments for perishable products beyond 30 days

2. Late payments for other food products beyond 60 days

3. Payments not related to any specific transaction

Refusal to acknowledge or abide by contractual terms

1. Short-notice cancellations (less than 30 days) of perishable goods

2. Unilateral changes to contract terms

3. Refusal to provide written confirmation of agreed terms when requested

Imposing buyer obligations onto the supplier

1. Transferring responsibility for product loss or deterioration

2. Passing on the cost of handling customer complaints

Supplier protection and confidentiality

1. Misuse of trade secrets

2. Commercial retaliation against suppliers who assert their rights

These practices undermine trust and create instability. Avoiding them isn’t just a matter of legal compliance—it’s essential to nurturing durable, equitable relationships between trading partners.

The Grey List: Avoiding Cost-Shifting Pitfalls

All six grey list provisions involve asking the supplier to pay for something you might otherwise expect the buyer to cover. These include:

• Listing, display, or stocking fees

• Promotional costs

• Advertising charges

• Marketing expenditure

• Cost of buyer’s staff fitting out retail premises

• Returning unsold stock without compensation

These practices are only lawful if clearly pre-agreed. Without proper documentation and communication, they can erode goodwill and open the door to disputes.

For suppliers, understanding these provisions means knowing when to push back. For buyers, it means ensuring transparency and proactively managing agreements to maintain fairness.

Enforcement Powers Are Real - and Growing

The Directive grants enforcement authorities strong powers, including:

• Initiating investigations (even without a formal complaint)

• Demanding documentation from buyers and suppliers

• Conducting unannounced inspections

• Issuing decisions and imposing fines

• Publishing enforcement outcomes

Penalties must be "effective, proportionate, and dissuasive.". With persistent concerns about the effectiveness of the rules, regulators remain incentivised to act decisively in cases of non-compliance. Businesses should not expect scrutiny in this area to disappear anytime soon.

Auditability: A Foundation for Trust and Compliance

Black list compliance requires adherence to all 10 unconditional rules. Grey list compliance depends on being able to prove that agreements were made in advance—not imposed unilaterally or introduced at the buyer’s discretion.

This presents operational challenges:

• Are agreements properly documented and accessible for audit or investigation?

• Is it clear when terms were agreed, by whom, and which transactions they apply to?

• Are systems in place to calculate payments accurately and avoid overclaims that may be seen as exploitative?

For both buyers and suppliers, digital tools can support transparency, accountability, and a shared understanding of what’s been agreed.

How Enable Supports Better Trading Relationships

Enable is already working with businesses across the agri-food sector to help them meet the demands of UTP legislation and foster healthier supply chain partnerships. Our platform:

• Centralises trading agreements, creating a single source of truth

• Builds a comprehensive audit trail of commercial and financial terms, approvals, and changes

• Tracks every interaction - from drafting to final sign-off - by both buyers and suppliers

• Ensures accurate calculations to support trust and prevent disputes

By making agreements structured, transparent, and collaborative, Enable helps partners not only meet their legal obligations but also strengthen long-term trading relationships.

A Shared Responsibility for Fairness

Compliance with UTP legislation is critical—but the bigger opportunity lies in using it as a framework for sustainable, respectful trading. When both buyers and suppliers understand the rules and commit to fair practices, they lay the groundwork for mutual growth and long-term success.

Whether you're a supplier seeking protection or a buyer managing compliance risk, Enable can help you create stronger partnerships rooted in transparency and trust.

Get in touch to learn how Enable can support your commercial goals - and turn regulation into relationship advantage.

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