German Agricultural Organisations and Supply Chains Act

The German Agricultural Organisations and Supply Chains Act (AgrarOLkG) serves to implement Directive (EU) 2019/633 (UTP Directive). The directive aims to introduce an EU-wide minimum standard to combat unfair trade practices. The AgrarOLkG contains various trade practices that are considered unfair for contracts between suppliers and buyers of agricultural, fishery and food products and are prohibited if the buyer’s annual turnover is disproportionate to that of the supplier. Certain lump sums apply in this regard. For example, if the supplier has annual sales of up to €2,000,000 and the buyer has annual sales of over €2,000,000, the unfair trade practices regulations apply. Unfair trade practices include, for example, payment terms of over 30 days for perishable and over 60 days for other agricultural, fishery and food products, or prohibiting the return of unsold agricultural, fishery and food products without payment of the purchase price.

Unfair trade practices cannot be effectively agreed between the supplier and the buyer. In addition, the German Federal Agency for Food and Agriculture (BLE) can issue orders to eliminate unfair trade practices and impose fines of up to €750,000. The BLE publishes its decisions on its website. The unfair trade practices regulations have been in effect since Aug. 24, 2021. Supply agreements entered into before June 9, 2021, must be brought into compliance with the unfair trade practices requirements by June 8, 2022.