To assist buyers in determining appropriate payment terms with suppliers for goods for which the indication of the date of minimum durability shall not be required – namely fresh fruits, berries, vegetables, and potatoes (the Products) – the Competition Council (the CC) has developed the informational material. The informational material provides criteria to help assess whether these Products are to be considered perishable within the meaning of the Prohibition of the Prohibition of Unfair Trading Practices Law (PUTPL). Accurate classification of the Products is essential, as it directly affects the permissible payment periods with suppliers.
Pursuant to PUTPL perishable agricultural and food products are products that by their nature or at their stage of processing are liable to become unfit for sale within 30 days after harvest, production or processing. However, the legislator has not provided a detailed explanation of the criteria based on which a specific product shall be regarded as perishable.
The informational material has been prepared proactively in response to the findings of the CC that buyers apply differing payment practices for perishable agricultural and food products[1]. In order to ensure legal certainty, consistency in the interpretation of the applicable provisions, and to mitigate potential risks of infringements of the PUTPL, the CC developed four mandatory criteria and three optional criteria to determine whether the Products are to be considered perishable and thus payments should be made in a shorter time frame. For example, a product will be deemed perishable if within 30 days after harvest it is not possible to preserve at least one of its initial characteristics — appearance, freshness, smell or taste. Additional creteria to be assessed include the harvest cycle of the product, whether special storage conditions are required, as well as the moisture content and other relevant characteristics of the product.
The informational material also explains the importance of the average turnover period at the point of sale or at buyer’s premises, along with the ordering and delivery frequency of Products. For example, If the average turnover period for the Products at the point of sale or at buyer’s premises is less than 30 days, or if ordering and delivery take place more than once every 30 days, it can be concluded with a high degree of certainty that such products are perishable.
The CC calls upon buyers to act responsibly towards their suppliers and to comply with the payment deadlines established in the PUTPL for delivered agricultural and food products. In accordance with the PUTPL, payments for perishable goods must be made no later than 30 days after delivery, and for non-perishable goods no later than 60 days after delivery.
The CC particularly urges retailers of agricultural and food products who cooperate with producers or their cooperative societies to comply with the payment periods for frequently delivered Products. Where the Products are delivered at least three times per calendar week, the payment period shall not exceed 20 days after delivery. An exception applies when the agricultural and food retailer and the producer or cooperative society of producers have agreed in writing on another payment period, provided that it does not exceed 30 days from the date of delivery. The CC also reminds that public institutions shall observe payment periods with their suppliers, except where the institution provides healthcare services. It should also be noted that the PUTPL payment term rules do not apply to buyers participating in the school distribution scheme.
[1] Findings of the CC from the market supervision “Payment Terms in the Supply Chain of Fresh Fruits, Vegetables and Berries” scheduled for completion in 2025.