The so-called UTP Act prohibits buyers from using certain terms and conditions and practices against suppliers of agricultural and food products. The Swedish Competition Authority exercises supervision and can, among other things, carry out unannounced inspections and order individual to attend formal interviews. In conjunction with violations, sanctions such as injunctions subject to a default fine or a sanction fee of up to one per cent of the buyer’s annual turnover can be imposed. The UTP Act will enter into force on 1 November 2021 and will also be applicable to contracts which are entered into prior to this date.
The UTP Act implements an EU directive concerning unfair trading practices, which is often designated as the UTP Directive. UTP is an acronym for unfair trading practices. The directive is intended to protect suppliers of agricultural and food products. The Swedish Act has a broader scope of application and, in certain respects, goes beyond the minimum requirements prescribed by the UTP Directive. Buyers who breach the Act risk becoming the subject of an investigation and may be subject to sanctions. Terms and conditions and practices which are contrary to the UTP Act may, under certain circumstances, also constitute abuse of a buyer’s dominant position contrary to the competition law rules.
The UTP Act applies in conjunction with the purchase of agricultural and food products when: (i) the buyer or the supplier is established in Sweden; and (ii) the buyer has an annual turnover which exceeds two million Euro or is an authority which is established in the EU.
The Act is thus applicable for buyers who are established in Sweden but also to buyers who are established abroad when the supplier is established in Sweden. In other words, the Act provides protection for suppliers of agricultural and food products who are established in Sweden, irrespective of the supplier’s annual turnover. As a consequence of the Swedish model, suppliers who are also financially larger and stronger than the buyer thus enjoy protection.
In the event several buyers perform a combined purchase, their annual turnover will be aggregated in conjunction with the assessment of whether the buyer has a turnover corresponding to more than two million Euro. If the buyer is part of a group of companies, it is the group’s turnover which is relevant. In a group with consolidated accounts, this means, for example, that the consolidated accounts, subject to certain amendments, will be used in conjunction with the calculation of whether the threshold value is met.
The UTP Act does not apply in cases where the buyer is a consumer.
Buyer means a natural or legal person, a group of natural or legal persons or a public authority which purchases agricultural or food products. Public authority means a decision-making body in a municipality or a region and such publicly governed organs as defined by the Swedish Public Procurement Act (PPA). The term buyer thus includes, among other things, economic associations/co-operatives, but also companies within the food industry, wholesalers, retailers, hotels, restaurants, bars and cafés, contracting public authorities and others who purchase agricultural and food products for resale or own use.
Supplier means a natural or legal person who sells agricultural and food products. It is only buyer’s use of unfair trading practices which falls within the scope of the Act. Certain actors can act as both buyers and suppliers, such as food industry companies and wholesalers. Examples of actors who essentially act exclusively as buyers for the purposes of the Act are public authorities and retailers.
The UTP Act contains a so-called black list of terms and conditions and practices which, subject to a few exceptions, are prohibited in connection with the purchase of agricultural and food products. This pertains to the following terms and conditions and practices:
The UTP Act’s black list also includes a refence to the Swedish Trade Secrets Act (2018:558) which contains provisions governing illegitimate attacks on trade secrets. This may apply, for instance, in relation to a buyer who illegally acquires, uses or discloses the supplier’s trade secrets.
The UTP Act also includes a so-called grey list with terms and conditions and practices which are prohibited unless the buyer and supplier have clearly and unequivocally agreed on the application thereof in advance. This applies to the following terms and conditions and practices:
In the event one practice which is referred to in paragraphs 3 – 6 above is permitted and applied in a certain case, the buyer shall, at the supplier’s request, provide a written calculation concerning payment per unit or from the total payment and/or a written cost estimation and the basis for this calculation.
The Swedish Competition Authority exercises supervision in respect of the UTP Act. The Swedish Competition Authority co-operates and exchanges information with the European Commission and supervisory authorities in other Member States. The Swedish Competition Authority has established a special unit for supervision. The unit is headed by unit manager Martin Bäckström. A guide for buyers and suppliers is available via the Swedish Competition Authority’s website.
Cases may be initiated at the initiative of the Swedish Competition Authority, or as a result of tips or complaints. Confidentiality applies in accordance with the Swedish Public Access to Information and Secrecy Act (PAISA) for information which can identify the complainant, or the supplier to which the notification relates, unless it is clear that the matter can be dealt with without the complainant or supplier suffering damage.
In order to exercise supervision, the Swedish Competition Authority may issue an order subject to a default fine to a buyer, supplier or third party to provide information, documents or other related items, and may also order a person who is expected to be able to provide information to attend a formal interview at a time and place which the Authority decides.
The Swedish Competition Authority can undertake unannounced inspections at buyers and thus has the right to access areas, premises and other spaces in which the buyer conducts operations, however not residential premises. In order to undertake such an inspection, the Swedish Competition Authority may request assistance from the Swedish Enforcement Agency. The Swedish Competition Authority does not have authority to look for documents. However, whilst at the relevant premises, the Authority can issue an order to provide information, documents or other items.
In conjunction with a breach of the prohibitions, the Swedish Competition Authority may issue an order subject to a default fine to a buyer to cease applying such a prohibited trading practice and/or unauthorised attack on the supplier’s trade secrets according to the Swedish Trade Secrets Act.
The Swedish Competition Authority can decide that a buyer who has applied a prohibited trading practice shall pay a sanction fee of up to one per cent of the buyer’s turnover for the previous financial year. A sanction fee may also be decided upon in the event a buyer has unlawfully attacked the supplier’s trade secrets. In conjunction with the determination of the size of the fee, specific consideration shall be given to the nature of the breach as well as the duration and scope thereof. Consideration shall also be given to whether the person against whom the decision is directed has previously breached the prohibition, and which circumstances exist to pay the fee. A sanction fee shall not be decided upon in minor matters. A decision concerning sanction fees shall be notified not later five years from the date on which the breach ceased.
The decision by the Swedish Competition Authority pursuant to the UTP Act can be appealed to the Administrative Court. Permission to appeal is required in the event of an appeal to the Administrative Court of Appeal.
It is evident from the preparatory works to the UTP Act that the UTP Directive does not pertain to civil law regulation and may thus not be invoked by one individual against another individual. Accordingly, the fact that a term and condition or a practice breaches the UTP Act is insufficient per se for the term and condition to be invalid or constitute the basis for a civil action for damages.
According to the UTP Act, agricultural and food products means all products which are listed in Annex I to the Treaty on the Functioning of the European Union, as well as products which are produced to be used as food through the use of products listed in the Annex.
The list of products stated in the annex incudes, inter alia: livestock, meat, pork and other edible animal parts, fish, crustaceans, milk and dairy products; eggs, honey, plants and floricultural products, fruit, peel from citrus fruits or melon, coffee, teas and spices, grain, malt, starch, gluten, straw and forage plants, animal and vegetable fats and oils, margarine, beet and cane sugar, treacle and other sugar solutions; cacao beans, wine from fresh grapes, other fermented beverages such as cider (apple and pear wines) and mead, vinegar, food waste from the food industry, prepared animal feed, raw tobacco and unprepared or prepared but not yet spun flax.
Please contact us. We advise both buyers and suppliers of agricultural and food products in various industries as well as parts in the value chain.
+ 46 (0)70 714 3167
+ 46 (0)72 179 1513
+ 46 (0)73 920 5513
+ 32 476 208 808
 Law (2021:579) regarding prohibition of unfair trading practices in the purchase of agricultural and food products. See also Regulation (2021:583) on prohibition of unfair trading practices in the purchase of agricultural and food products. For the preparatory works, see Government Bill 2020/21:134 and Department Memorandum Ds 2019:19.
 Directive (EU 2019/633 of the European Parliament and of the Council of 17 April 2019 regarding unfair trading practices between companies in the agricultural and food supply chain. See also, among others, the Commission’s report on unfair trading practices between companies in the food supply chain COM (2016) 32 final, dated 29 January 2016; notice of control against unfair trading practices between companies in the food supply chain COM (2014) 472 final, dated 17 July 2014; and Green Paper on unfair trading practices in the B2B food and non-food supply chain COM (2013) 37 final, dated 31 January 2013.