Get Ready: Irish Agri-Food Sector Braces for Upcoming Compliance Inspections

The Agri-Food Regulator is an independent authority aimed at promoting fairness and transparency in business-to-business relationships along the agri-food supply chain. It was established on 13 December 2023 and has two main responsibilities:

1) Enhancing compliance with and enforcement of the Unfair Trading Regulations and

2) Provision of information on the agri-food supply chain through engagement with stakeholders and the analysis of price and market data.

The Unfair Trading Regulations aim to protect suppliers of agricultural and food products who, due to a weak bargaining position relative to the buyer of their product, need protection. These regulations protect against 16 specific unfair trading practices by buyers where:

(i) the supplier's annual turnover is lower than that of the buyer; and

(ii) the buyer’s annual turnover is greater than €2m.

In addition, the Unfair Trading Regulations apply to sales of agricultural and food products by a supplier to a buyer which is a public authority (regardless of turnover).

The Unfair Trading Regulations protect against the following 10 unfair trading practices in all circumstances:

1) Paying later than 30 days for perishable agricultural and food products;

2) Paying later than 60 days for other agricultural and food products;

3) Short-notice cancellations of perishable agricultural and food products; 

4) Unilateral contract changes by the buyer;

5) Payment not related to a specific transaction;

6) Risk of loss and deterioration transferred to the supplier;

7) Refusal of written confirmation of a supply agreement by the buyer, despite request of the supplier;

8) Misuse of trade secrets by the buyer;

9) Commercial retaliation by the buyer;

10) Transferring the costs of examining customer complaints to the supplier.

Suppliers are safeguarded against six unfair trading practices, provided  there is prior agreement between them and their buyer:

1) Buyer returning unsold products to the supplier without paying for those unsold products or for disposal of those products or both;

2) Payment by the supplier for stocking, display or listing of products or of making such products available on the market;

3) Requiring the supplier to bear all or part of the cost of any discounts on products sold by the buyer as part of a promotion;

4) Payment by the supplier for advertising;

5) Payment by the supplier for marketing;

6) Payment by the supplier for staff for fitting-out premises used for the sale of the supplier’s products

The Unfair Trading Regulations also place reporting obligations on buyers of agricultural and food products established in the State with an annual turnover in excess of €50m (known as ‘Compliance Reporting Buyers’):

• Liaison Officers: Compliance Reporting Buyers are required to designate a suitably qualified staff member to act as liaison officer with the Agri-Food Regulator in relation to Unfair Trading Regulations and to confirm the officer’s name, position and contact details to the Regulator; and
• Annual Compliance Reports: Compliance Reporting Buyers are required to submit an annual compliance report to the Agri-Food Regulator. This report,which is due no later than 31st March each year, must detail  the Compliance Reporting Buyer’s compliance with the Unfair Trading Regulations for the preceding calendar year. The first report is due to be submitted to the Agri-Food Regulator by 31 March 2025.  

Authorised officers of the Agri-Food Regulator are empowered to serve formal compliance notices on buyers. These notices require a buyer to take, or refrain from taking, specified action, for the purpose of ensuring compliance with the Unfair Trading Regulations. Moreover, should a breach of the Unfair Trading Regulations be proven in court, a judge may impose:

• on summary conviction, a class A fine (i.e. a fine not exceeding €5k) or imprisonment for a term not exceeding 6 months or both, or
• on conviction on indictment, a fine not exceeding the greater of €10m or 10% of the aggregate turnover of the person in the financial year in which the offence was committed or imprisonment for a term not exceeding 3 years, or both.

The Agricultural and Food Supply Chain Act 2023 provides wide ranging investigative powers to the Agri-Food Regulator for the purpose of enforcing the Unfair Trading Regulations. Authorised officers of the Agri-Food Regulator may:

receive and investigate complaints from suppliers (i.e. allegations that a specified buyer has engaged in, or is engaging in, an unfair trading practice) where the supplier/buyer is established in the State;

at any reasonable time enter premises to carry out inspections of records relating to or anything used in connection with agricultural and food products;

enter premises where the officer has reasonable grounds for believing that (a) an offence under this Act has been, is being, or is about to be committed on the premises, or (b) evidence of an offence under this Act is likely to be found on the premises (or in anything on the premises); and

examine records and inspect and take copies of anything used in connection with an agricultural and food products. This does not need to be on the basis of a complaint or suspicion of an alleged infringement.