The Government of Serbia and the Ministry of Internal and External Trade have announced the draft Unfair Trading Practices Act, a significant legislative step aimed at balancing the power dynamics between the retailers and the suppliers.
The new law is designed to align Serbia's regulatory framework with European Union standards, specifically Directive (EU) 2019/633, ensuring a more transparent and predictable market environment.
The law will apply to the agricultural and food products, but also to household chemicals, personal hygiene products, and cosmetics, as well as the plant nutrition and plant protection products (fertilizers), and soil improvers.
The draft law makes the difference between black-listed practices and grey-listed unfair trading practices. The black-listed practices include payment delays (30 days for perishable food and agricultural products, and 60 days for other agricultural and food products), last-minute cancellation of orders, unilateral changes by the buyer of the contract terms, requesting of payments unrelated to the sale of the supplier's goods, etc. The grey-listed unfair trading practices include returning of the unsold products to the supplier (without payment), charging the supplier for shelf placement or listing of the products (with certain exceptions), charging the supplier for advertising of the products, etc.
The draft law also prohibits retaliation measures carried by the buyers against their suppliers, such as delisting of the supplier's products, decreasing of the ordered quantities or frequency of orders, restriction of services that the buyer otherwise provides to the supplier, such as marketing, promotion, or additional displaying of the products, etc.
The draft law is empowering the Commission for Protection of Competition to monitor compliance. In case of the black-listed unfair trading practices, the Commission may impose a fine in range up to 0.2% of the infringing party's annual revenues generated on the Serbian market, while the fine in case of grey-listed practices, and applying of retaliation measures can be up to 0.1% of the revenues generated on the Serbian market. The competition authority may also order amendments of the contract terms in order to be aligned with the law, and impose procedural penalties of approx. 4,250 Euro for each day of obstruction of the proceedings before the authority.
The Serbian competition authority may carry announced and unanounced inspections (dawn raids) at the premises of the companies in case of indication of unfair trading practices.
The companies are required to align their contracts, general terms and conditions, and internal guidelines with the Act within four months as of coming of the law into force. In addition, the companies are required to prepare the overview of the financial elements of the contract; in case of failure to do so, the companies are exposed to fines in range from approx. 425 Euro to approx. 17,000 Euro.