November 26, 2020

The Government approves a decree law to pursue the sale to losses in the agri-food sector | Economy

The Government approves a decree law to pursue the sale to losses in the agri-food sector | Economy

The Council of Ministers approved on Friday a royal decree law to pursue and sanction the sale to losses of agri-food products in the whole chain of the large distribution and not only in the final stretch, when the article reaches the consumer. This new regulation modifies the article of the Retail Trade Law that regulated the sale to losses and that declared null the Court of Justice of the European Union (CJEU) in 2017. The text approved this Friday prohibits that type of sales, in the case of certain practices, if they are considered unfair. The agrarian organizations demanded that this prohibition happened to be contemplated in the Law of the Food Chain and that the control was made by Agriculture, and not by Commerce and the Autonomous Communities.

The persecution of the sale to losses was contemplated in Spain as much in the Law of Retail Trade as in the Law of Unfair Competition. The first norm opened the door to sanction this behavior when it affected the interests of consumers, and it is the regulation to which the Murcian government appealed to impose in 2015 a fine to the distribution company Europamur Food. The company, however, appealed the penalty, and its case reached Luxembourg.

The CJEU then ruled against the sanction of Murcia's General Directorate of Consumption, considering that the alleged reason for imposing the fine on Europamur was not contemplated in the EU directive 2005/29 on unfair commercial practices. This regulation establishes in a list which are the unfair practices that can be banned in a generalized way, and the sale to losses does not appear in it. Spain, for its part, considered it an unfair commercial practice a priori, without allowing the cases to be studied in the courts. With the verdict of last year, the community judges established that Spanish regulations did not comply with European legislation, and that therefore had to be modified.

On the other hand, the Law of Unfair Competition contemplates the report for sale at losses only in three cases: when this behavior incites consumers to error over the price level of other products, when it aims to discredit the image of a product or of other establishments, or when the objective is to eliminate a competitor from the market, in all cases with a large dose of subjectivity in the face of a trial.

The agrarian sector did not value the existence of this provision to combat the sale losses because the complaints had to be solved in the courts, not by the Administration, and also the complainant had to face the distribution. With this new provision, the pursuit of the sale at a loss will be in the hands of Commerce and the Autonomous Communities.


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