Close [x]
By using the site you express your consent to the use of cookie files, some of which may be already saved in the browser folder.
For more information, please follow the Privacy and using cookie files policy for the service

Office of Competition and Consumer Protection

Increase font sizeDecrease font sizeHigh-contrast versionText versionText versionRSS ChannelGet QR codeWersja polska

You're here: Home > About us > About us > News

Superior bargaining power - proceedings of the President of UOKiK against PolishAgri

< previous | next > 25.03.2021

Superior bargaining power - proceedings of the President of UOKiK against PolishAgri
  • President of UOKiK Tomasz Chróstny brought charges against PolishAgri, a company that buys and sells grain and rapeseed.
  • The company may be unfairly abusing its superior bargaining power against suppliers.
  • The Office will also examine the practices of other companies buying grain and rapeseed.

PolishAgri purchases wholesale of various types of grain including wheat, rye, triticale, malting barley and rapeseed - mainly for export. It is a leading exporter in western Poland. Each year, it sells approx. 100,000 tons of grain and rapeseed to customers, including Germany, the Netherlands and Scandinavian countries. The company cooperates with several hundred suppliers of agri-food products, which are generally individual farmers, operating their farms on a small scale. The parties operate under a pre-drafted model contract, and an individual supplier has no influence over its content. The Office's findings so far indicate that the terms of this contract may be detrimental to the suppliers, by requiring deliveries also in the event of circumstances beyond the farmer's control that prevent performance of the contract. President of UOKiK Tomasz Chróstny charged PolishAgri with unfair use of superior bargaining power.

Agricultural activity is particularly dependent on weather conditions. Drought, excessive rainfall or flooding can cause crop losses that cannot be either predicted or prevented. In their contracts with PolishAgri, farmers commit to deliver a certain quantity and quality of agricultural products. Contracts are usually concluded during or immediately before the production process. From the evidence gathered, it appears that the company is placing undue risk on the farmers to fulfill the contract. It requests that farms deliver their contracted supplies despite circumstances beyond their control, particularly force majeure, preventing the delivery of the agreed quantities of grain or rapeseed. These circumstances can be climatic conditions, natural forces or disasters. When suppliers are unable to sell the contracted products from their own farm, they are required to purchase them "on the open market" or bear the cost of a substitute purchase made by PolishAgri. The Company then provides for severe penalties for failure to perform the contract.

“Under the principles of good practice in the food supply chain, it is necessary to take into account the risks borne by farmers. The liability mechanism applied by the company may be particularly severe for those farms that only supply products from their own operations. I brought the charges against PolishAgri, pointing out that it is an unfair practice to require farmers to deliver their contracted commodity in the event of circumstances beyond their control that would prevent delivery, such as drought. We also consider it an abuse of superior bargaining power to require farmers to purchase products on their own behalf in order to fulfill their contract with the company in such situations. And all this under the threat of high financial penalties,” the President of UOKiK, Tomasz Chróstny, explains.

On the basis of the evidence gathered in the course of the investigation, it appears that contractual terms unfavorable to suppliers were implemented by the company in practice. It follows from reports received by the Office that farmers who have approached PolishAgri with documentation proving their losses following weather phenomena have been denied a fair settlement of the contract. As stated by independent provincial commissions – on a case-by-case basis, these losses amounted to up to 70% of the average annual agricultural production.

For the unfair use of contractual advantage, the company may be fined by up to 3% of its annual turnover.

Entrepreneur, farmer, if you operate in the agri-food industry and your major counterparty abuses its competitive advantage by imposing unfavorable conditions of cooperation – report it to UOKiK. We have launched a special form to assist you in reporting irregularities.

You can fill it out here: https://ankieta.uokik.gov.pl/formularz-zgloszenie-przewaga/

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]
Twitter: @UOKiKgovPL

Attached files

 

Read also

Polkomtel will remove irregularities related to premium text messages and pay compensation to consumers
Polkomtel will remove irregularities related to premium text messages and pay compensation to consumers

Has Polkomtel rejected your complaint regarding premium services using 7218 and/or 60228 numbers? You will receive a refund in the amount of double the fee you paid for these services. ...>

Investment bills - decision and new proceedings
Investment bills - decision and new proceedings

The President of UOKiK Tomasz Chróstny has issued a decision regarding Fundusz Hipoteczny Yanok (Yanok Mortgage Fund), which issues the so-called investment bills. ...>

President of UOKiK initiates proceedings concerning the practices of Cefetra Polska
President of UOKiK initiates proceedings concerning the practices of Cefetra Polska

The President of UOKiK Tomasz Chróstny initiated proceedings against the Cefetra Polska company. The entrepreneur may be unfairly exploiting its contractual advantage. ...>

Launch of the UOKiK's project concerning consumer protection system in Armenia
Launch of the UOKiK's project concerning consumer protection system in Armenia

On 1 July, UOKiK began implementing the project "Institutional Strengthening of the Republic of Armenia in Building a Consumer Protection System". The project is co-financed within Poland's development cooperation programme run by the Ministry of Foreign Affairs. ...>

#UOKiKtestuje - travel mugs
#UOKiKtestuje - travel mugs

The Office of Competition and Consumer Protection tested 10 models of travel mugs. We checked how effective they are in keeping the contents hot or cold, how functional the lids are, and whether they are leak-proof and drop-resistant. ...>

Compensa changes the definition of intense care unit for the benefit of consumers
Compensa changes the definition of intense care unit for the benefit of consumers

Following the comments of the President of UOKiK, Compensa TU na Życie S.A. Vienna Insurance Group has decided to change the current definitions of the ICU and stay at the ICU. ...>

Top