Unfair trading practices in the agri-food supply chain: What businesses need to consider

Compliance with the Unfair trading practices (UTP) Directive is taking shape in Germany: the Federal Office for Agriculture and Food (Bundesanstalt für Landwirtschaft und Ernährung, BLE) has conducted its first proceedings, the Higher Regional Court of Dusseldorf has drawn important boundaries, and the legislature has further refined the legal framework.

European framework, German implementation

The UTP Directive (EU) 2019/633 protects suppliers in the agri-food supply chain from unfair trading practices. It sets an EU-wide minimum standard, but allows for stricter national rules. The European Commission presented an initial evaluation in 2025: the number of investigations and enforcement measures is rising, whilst at the same time many suppliers remain reluctant to lodge complaints for fear of possible reprisals. Furthermore, cross-border cooperation between authorities is to be strengthened.

Germany has transposed the Directive into the Agricultural Organisations and Supply Chains Act (Agrarorganisationen- und Lieferketten-Gesetz, AgrarOLkG). The Act is intended to ensure fair B2B supply relationships within the agricultural, fisheries and food supply chains, and combines contractual requirements with enforcement under public law by the BLE. In practical terms, it is particularly relevant to purchasing terms, payment terms, returns, discounts, listing and marketing fees, as well as other cost contributions payable to suppliers.

Who the AgrarOLkG protects – and what is prohibited

Protection is not limited to primary producers. Depending on the supply relationship and turnover thresholds, processors, manufacturers, wholesalers and other suppliers of agricultural, fisheries or food products may also be covered. In practice, therefore, the first crucial step is to assess the scope of application: the product category, the supplier-buyer relationship, the territorial scope and the turnover thresholds must correspond to the specific contractual relationship.

In substance, the Act distinguishes between practices that are strictly prohibited and those that are only permissible if they have been clearly and unambiguously agreed in advance. Key areas of risk include excessively long payment terms, returns of unsold goods, last-minute cancellations of perishable goods, unilateral rights of the buyer to make changes, the passing on of certain costs to suppliers, and retaliatory measures or the threat thereof. On certain points, Germany goes beyond the minimum standards of the Directive, particularly with regard to the protection of certain larger suppliers.

New practice: BLE, Higher Regional Court (OLG) of Dusseldorf and dm

The BLE can investigate complaints or initiate investigations on its own initiative, prohibit infringements, recoup benefits, publish decisions and impose fines of up to EUR 750,000. German practice to date has not been characterised by high fines, but rather by case reports, proceedings following contract amendments and judicial review of BLE decisions.

Two decisions by the Higher Regional Court of Dusseldorf (Oberlandesgericht, OLG) from 2025 are particularly significant. In the HIT proceedings, the court overturned a BLE decision concerning so-called ‘product range services’, store-opening contributions and unilateral rights to amend contracts. According to this ruling, payments for a wider product range or for new and reopening stores are not per se unlawful if there is a specific, actually rendered consideration on the part of the purchaser. However, unclear considerations, guarantee amounts and unilateral rights to make changes remain risky.

In the Edeka v Arla proceedings, the OLG Dusseldorf overturned a further BLE decision concerning payment terms for fresh milk and cream products. The decisive factor was not the perishable nature of the products, but the applicability of the AgrarOLkG on the basis of turnover thresholds. This brings the correct allocation of turnover within retail groups, cooperatives and purchasing cooperatives into focus.

The BLE’s administrative practice also remains relevant. A case against dm, concluded in 2025 following contractual amendments, concerned the delisting of commercially unsuccessful products, returns of remaining stock, and retrospective discounts or compensation payments. The case demonstrates that the BLE takes a critical view of arrangements that shift sales risks back to suppliers in economic terms.

Relevance for contractual practice

Before agreeing to, continuing or enforcing UTP-sensitive terms, buyers should document whether the relevant supply relationship falls within the scope of the AgrarOLkG. If it does, they should check in particular:

• whether payment terms, returns, delistings and retrospective discounts comply with the statutory requirements;
• whether marketing, product range and promotional services, as well as contributions towards store openings, are clearly agreed and can be calculated transparently;
• whether payments by the supplier are clearly described in the contract, calculated in a comprehensible manner and attributable to a specific consideration provided by the buyer; and
• whether contractual mechanisms indirectly shift sales risks or costs back onto suppliers.

Complaints may be lodged with the BLE; the law provides for confidentiality in this regard. Industry associations and supplier organisations may also play a role in addressing structural issues.

The UTP regime is continuing to evolve – both in Germany and at EU level. For companies in the agricultural, food and retail supply chain, a one-off review of clauses is therefore insufficient. It is crucial to integrate UTP compliance into terms and conditions negotiations, procurement processes and supplier management.