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Amendment to the contractual advantage act – reference prices

Amendment to the contractual advantage act – reference prices

In the second half of May 2019, the Ministry of Agriculture submitted a draft amendment to the Act of December 15, 2016 on Counteracting Unfair Use of Contractual Advantage in Agricultural and Food Products. The amendment is to introduce reference prices for selected agricultural products into the Polish competition law system. We present elaboration on all proposed changes in the table below. The project is currently at an early stage of the legislative process and in the coming days it is to be submitted to the Permanent Committee of the Council of Ministers.
 

  Now  After the amendment
Exclusion of the application of the Act
Currently, the Act does not apply when: 
  • a supplier sells agricultural products to a cooperative to which they belong,
  • a member of the agricultural producers group sells products to this group, 
  • a member of the fruit and vegetable producer organization sells products to this organization.
Moreover, the following transactions will be excluded from application of the act:
  • transactions via the commodity exchange,
  • transactions within the financial instruments trading system. 
The new tort of unfair use of contractual advantage  The use of a contractual advantage is unfair if it is contrary to good morals and threatens the essential interests of the other party or violates such an interest. Article 7 sec. 2 of the Contractual Advantage Act lists examples of such torts, including but not limited to unjustified termination of the contract, the threat of terminating the contract or unjustified extension of the terms of payment for the delivered agricultural or food products. An example of a tort is the purchase of an agricultural product for which a reference price had been set, below that price, unless the supplier expresses a willingness to sell such a product at a price lower than the reference price by submitting a written declaration to the buyer.
Reference price – product categories   The minister competent for agricultural markets will be given the authority to specify - by a regulation - the products for which the reference price will apply. The minister will be guided by "the economic importance of particular agricultural products for domestic agricultural production".
Reference price – the price amount   The minister competent for agricultural markets will be granted the authority to determine reference prices of agricultural products and to do so twice a year by making an announcement. The minister will be guided by "the costs related to the production of an agricultural product and profitability of agricultural production, as well as the supply and demand situation on foreign markets in relation to the given agricultural product”


Michał Dudkowiak

Lawyer

Michał Dudkowiak

Barrister, Partner

Michał Dudkowiak

Contact:

Rondo ONZ 1
00-124 Warsaw