The Estonian Competition Authority has issued a memorandum to buyers and sellers operating within the agricultural products and food supply chain, signaling a firm stance against the erosion of fair commercial conduct. The move comes in response to several worrying reports indicating that certain buyers have engaged in practices during price negotiations that may harm the interests of sellers and undermine competitive fairness.
Clarifying the Rules of Engagement
The Authority’s letter serves as a potent reminder of the binding requirements set forth in both the Act on the Prevention of Unfair Trading Practices (UTPs) and the overarching Competition Act. The goal is clear: to equip market participants with the knowledge necessary to consciously avoid activities that could violate the law.
The memorandum specifically addresses the critical, yet often blurred, lines of communication during pricing talks. It meticulously explains what information is permitted to be exchanged and, crucially, what information is prohibited from being shared. This guidance is paramount for preventing activities that border on or constitute illegal collusion, such as the sharing of sensitive commercial data that could lead to price-fixing or market coordination among competitors.
A Call for Good Faith
By recalling the requirements of the UTP Act, the Authority emphasizes that the power dynamic often favoring large buyers over smaller, fragmented sellers must not be abused. The law is designed to ensure transactions are rooted in the principles of good faith and lawful conduct.
The document concludes with an urgent appeal to all companies operating in the agricultural and food sector. The Authority insists that firms must immediately undertake a rigorous internal review to assess whether their current negotiation practices fully comply with these foundational principles. This proactive measure is intended to foster a sustainable and genuinely competitive environment where all market participants can operate without the threat of unfair exploitation. The clear message is that compliance is not optional; it is a legal imperative that safeguards the integrity of the supply chain.