Reference prices for agri-food products – amendment to the act on contractual advantage

On Tuesday, 21^st of May 2019, a draft amendment to the Act on the Organization of Certain Agricultural Markets and the Law on Contractual Advantage appeared on the website of the Ministry of Agriculture. The project envisages the introduction of reference prices into the Polish legal system for selected agri-food products. Purchasing products at lower prices than the reference price is to be automatically treated as unfair use of a contractual advantage. Below we present the basic assumptions of the draft amendment.

Reference prices – what products?
The minister competent for agricultural markets will determine by regulation the list of agricultural products to which reference prices will apply. The minister when selecting products is to be guided by their economic importance for domestic agricultural production.

Reference prices – who will determine their amount and on what criteria?
The minister responsible for agricultural markets, twice a year, will determine the reference price of a given agricultural product, guided by:

• the cost related to the production of an agricultural product,
• profitability of agricultural production and
• supply and demand situation on foreign markets.

Reference prices – non-compliance sanction?
In accordance with the currently proposed wording, the purchase of agricultural products below the reference price will automatically be treated as unfair use of contractual advantage and, as a consequence, will result in a UOKIK penalty of up to 3% of turnover achieved in the financial year preceding the year of imposition of this penalty.

Reference prices – exclusions
The draft amendment proposes that the reference price should not be binding if „the supplier expresses the will to sell such a product at a price lower than the reference price by submitting a written statement to the buyer”.

In addition, it is proposed that reference prices should not apply in the event of trading via a commodity exchange or a trading system for financial instruments.