Simplify This: The Ongoing Review of the UTP Directive
Introduction
The EU legislator certainly has a penchant for long titles and uninformative acronyms. The UTP Directive 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain is no exception. How about e.g., the “Food and Agriculture Redress Mechanism” (the FARM Act) instead?
Anyhoo. UTP laws have been in force in most Member States since 2021, and the Directive is now being reviewed. The deadline for contributions to the consultation is 27 February 2026 (see here), and adoption is envisaged for Q4 2026. In the following, we discuss some of the themes of the review and make the case for further harmonization.
The Consultation
The Directive aims to address power imbalances in agricultural and food supply chains by imposing fairness obligations on large buyers of food and agricultural products vis-à-vis smaller suppliers. It is a minimum-harmonisation instrument, leaving Member States free to adopt or maintain stricter rules. This has contributed to wide divergence across the EU, both in legislation and enforcement practice.
The minimum requirements set out in the Directive consist of a “black list” (Art. 3(1)) and a “grey list” (Art. 3(2)) of unfair trading practices. Practices on the black list are always unlawful, while the grey list contains practices prohibited unless the parties have explicitly agreed to them in writing.
The evaluation materials informing the review point in different directions. There is evidence of concrete improvements for suppliers on specific issues, notably late payments. But criticism persists that the legislation has not shifted the underlying power dynamic in the supply chain. Suppliers may still be induced to sell food and agricultural products at a loss, and buyers may deploy new onerous practices that fall outside the Directive’s enumerated prohibitions. Concerns have also been raised about uneven application across the EU.
Against that backdrop, the Commission’s consultation reopens the discussion on several key features of the UTP Directive, including:
Should the black and grey lists be complemented by an open-ended general clause covering other or new unfair trading practices?
Should an anti-circumvention clause be introduced for conduct that falls outside the literal wording of the prohibitions but achieves similar results?
Should the choice of instrument be reconsidered? In other words, is a directly applicable EU regulation preferable to a directive, and/or should soft-law instruments replace or complement the Directive?
Should additional practices be prohibited, including practices related to unfair pricing?
Too complex and costly to comply with?
Reducing the regulatory burden for European businesses is one of the Commission’s key priorities, emphasised in both the Draghi and the Letta reports. Ursula von der Leyen captured the point in her November 2024 address to the European Parliament:
“For Europe to catch up, we will also need to make things easier for our companies. They are telling us that the regulatory burden weighs heavily on them. Too much reporting. Too many overlaps. And too complex and costly to comply with. We need to streamline our rules to reduce the burden on businesses. And we need to give legal certainty about what we expect from them. […] the greatest strength of the Single Market is that it replaces the myriad national standards and customs, with a single set of rules. So we need to get back to what the Single Market does best. And make business easy across Europe.”
The UTP review is a good opportunity for the Commission to put this ethos into practice.
Having advised companies operating in multiple Member States on UTP cases, we have seen first-hand the complexity the Directive has created. Operators have had to interpret a host of new provisions with limited guidance, manage the risk of divergent national interpretations, and engage with multiple enforcement authorities in parallel. Differences in implementation between member states are so material that the Directive cannot be used as a reliable compliance baseline. For a pan-European operator, UTP compliance has effectively meant adapting to 27 new laws at once.
A recent Swedish judgment illustrates the situation well. A wholesaler of fruits and vegetables was fined approximately EUR 500,000 under a national UTP act for conduct that would have been lawful under the text of the Directive. The company was unaware that Sweden had not implemented the 12-month transition period for pre-existing agreements set out in Article 1(4). Tellingly, it appears Sweden was the only Member State to have made this particular implementation choice.
Such cases align with the broader findings of the Commission’s support study. The study notes “a remarkable variety of national implementation choices and enforcement arrangements” and “wide agreement” between businesses and independent experts on two main points:
“Substantial differences in implementing legislation at national level make the achievement of compliance rather complex for all the business operators that supply and/or source agricultural raw materials and (processed) agri-food products to/from multiple MSs.”
“The uneven level of protection from UTPs ensured across the EU (due to the heterogeneity of national implementing rules and of enforcement arrangements) might result in non-level playing field conditions for both suppliers and buyers of agri-food products. Such conditions might also derive from inconsistent enforcement of the Directive in intra-EU cross-border UTP cases. […]”
As noted in the study, the complexity and regulatory burden largely result from Member State choices, rather than being a necessary consequence of the Directive itself. Nevertheless, had the UTP rules been adopted as a regulation, many of these differences would not have emerged. Rather than merely retaining stricter pre-existing rules, Member States seem to have treated the Directive as a rough first draft, to be substantially reworked at the national level.
What could simplification look like?
Some suggestions:
Replace the Directive with a directly applicable regulation, thereby significantly reducing the level of divergence across the EU. This would also allow a coherent body of case law to emerge from the EU courts.
Pair the regulation with interpretative guidance and fining guidelines, drawing on Member State enforcement experience. This would help enforcement authorities and businesses across the EU converge on a consistent application.
Simplify the Article 1(2) turnover matrix, for example by introducing a single buyer-size threshold and removing supplier-size thresholds. This would remove the need for case-by-case eligibility analysis for businesses while predictably exempting small buyers.
Resist an open-ended general clause. The current exhaustive list model provides clarity and predictability. If new UTPs emerge, they can be added to the lists. An open-ended clause would multiply complexity for European businesses and increase the risk of fragmentation.
None of this, in itself, implies a higher or lower level of supplier protection. It can sit alongside an expanded, narrowed, or unchanged list of prohibited practices. But it would materially reduce compliance costs, allow resources to be more efficiently deployed, and move the EU closer to a genuinely level playing field for suppliers and buyers of agri-food products across the Single Market.
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Trading practices covered by the Directive:
Black list (always prohibited):
Payments later than 30 days for perishable agricultural and food products
Payment later than 60 days for other agri-food products
Short-notice cancellations of perishable agri-food products
Unilateral contract changes by the buyer
Payments not related to a specific transaction
Risk of loss and deterioration transferred to the supplier
Refusal of a written confirmation of a supply agreement by the buyer, despite request from the supplier
Misuse of trade secrets by the buyer
Commercial retaliation by the buyer
Transferring the costs of examining customer complaints to the supplier
Grey list (prohibited unless previously agreed in writing):
Return of unsold products
Payment of the supplier for stocking, display and listing
Payment of the supplier for promotion
Payment of the supplier for marketing
Payment of the supplier for advertising
Payment of the supplier for staff of the buyer, fitting out premises