Belgian-Macedonian Business Club

Trading food to retail stores? The government tries to keep inflation down. Find the essential information of the news law.

Main Provisions of the Law

The new Law on the Prohibition of Unfair Trade Practices in the Supply Chain of Agricultural and Food Products introduces several measures aimed at ensuring fairness and transparency. One of the primary provisions mandates that all contracts for the supply of agricultural and food products be in writing. These contracts must detail essential elements such as price, quality, delivery terms, payment terms, and contract duration to prevent disputes and ambiguities. The Law also identifies and prohibits several unfair trade practices, including unilateral contract changes, unauthorized payments, threats of retaliation, and forced services. Specific payment terms are established, limiting the payment period to 30 days for perishable products and 60 days for non-perishable products from the agreed delivery period or the date the amount payable is determined. Significant bargaining power is defined based on income thresholds and corporate relationships to ensure fair treatment of suppliers regardless of the buyer’s financial strength. The Commission for the Protection of Competition is tasked with overseeing compliance, conducting investigations, and collaborating internationally to address unfair trade practices.

Who the law applies to

The Law applies to buyers, including any natural or legal person, public body, or group involved in purchasing agricultural and food products, regardless of their location. It also applies to suppliers, encompassing agricultural producers or any natural or legal person selling agricultural and food products, including producer organizations and associations. Public bodies at the national, regional, or local level, as well as public legal entities and associations formed by such bodies, are also covered under the Law. The Law specifically targets transactions between suppliers and buyers registered in North Macedonia, excluding relationships between suppliers and consumers. Corporate relationships where one entity holds substantial shares or exerts dominant influence over another are considered collectively for assessing significant bargaining power.

How It Affects Your Business

Suppliers and buyers must ensure that all supply contracts are in writing, detailing essential elements such as price, delivery, and payment terms. This requirement increases transparency and reduces the risk of disputes. Business practices must align with the Law’s prohibitions such as unilateral contract changes, unauthorized payments, and imposing unjustified costs on suppliers. Adherence to the specified payment terms for perishable and non-perishable products is ensuring timely payments and avoid penalties. Businesses with significant bargaining power, as defined by income thresholds, must be mindful of the Law’s criteria to ensure fair dealings with suppliers. Non-compliance with the Law can result in substantial fines, and the Commission for the Protection of Competition will actively monitor and enforce these regulations.  

Legal information is provided via Apostolska Aleksandrovski & Partners, member of SELA South East Legal Alliance. To receive this information automatically, you can subscribe to their newsletter here.
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