Food Market Act proceeds to Parliament – food market ombudsman to have a strong role

On 13 September 2018, the Government submitted to Parliament a government proposal for a Food Market Act. The Act is set to enter into force on 1 January 2019 and its objective is to improve the functionality of food markets and protect operators in vulnerable positions in the food production chain. A food market ombudsman will be appointed to monitor food commerce.

The Act would ensure that producers have access to agreements on the sales of agricultural produce in writing. The Act also aims to prevent entrepreneurs in the agricultural produce and foodstuffs trade from implementing unreasonable terms and conditions or methods that go against good market practices or are otherwise unfair to the other parties involved. The Food Market Act would also lay down provisions on a food market ombudsman who would be in charge of monitoring compliance with the requirements and prohibitions detailed in the Act.

“The ombudsman to be established in the Act will be able to intervene in cases of unfair practices in the food production chain. I believe this will even out the food production playing field. It’s great that we are now getting a long-awaited external authority and that they will have strong authorisation to defend those in weaker positions in the food production chain,” comments Minister of Agriculture and Forestry Jari Leppä.

If the food market ombudsman observes that an entrepreneur has engaged in illegal operations, the ombudsman’s task would be to negotiate with the entrepreneur in question to persuade them to cease their illegal practices. The ombudsman could determine whether the entrepreneur in question has complied with the written form and minimum requirements of the contract and, if necessary, could issue a notice or public warning on the matter. Additionally, the ombudsman could appeal to the Market Court to obtain a prohibition against unfair conduct towards other entrepreneurs and issue a notice of a conditional fine for such conduct. The ombudsman could also issue recommendations, statements and proposals concerning the food production chain, and provide information and advice to food production operators about good business practices.

Consultation with the Board of Trading Practices in the Food Supply Chain to be laid down in the Act

Based on the request for comments, the cooperation between the ombudsman and the existing self-regulatory body was strengthened so that prior to issuing recommendations, the ombudsman must request a statement from the self-regulatory body of the food supply chain. In practice, this is the Board of Trading Practices in the Food Supply Chain, which operates in connection with the Finland Chamber of Commerce.

The position of Food Market Ombudsman would be established under the Finnish Food Authority in the beginning of 2019. The establishment of the public post and office is estimated to cost around EUR 500,000 in 2019. The government proposal for the Food Market Act is included in the 2019 budget proposal and will be discussed in that context.

The Act is expected to increase the likelihood that the main terms and conditions will be established in written contracts, reduce the risks of activities that go against good business practices and improve the functionality of food markets. In the early stages of implementation of the new Act, the formalisation of written contracts and their documentation will increase costs for those operators whose current contracts do not correspond to the requirements laid down in the Act. It is expected that the regulatory control laid down in the Act will function primarily as a preventive measure against illegal activities.

Inquiries at the Ministry of Agriculture and Forestry:

Risto Lahti, Special Adviser to the Minister, tel. +358 50 565 0424

Minna-Mari Kaila, Director General, tel. +358 40 775 6060, minna-mari.kaila(at)mmm.fi

Aku-Petteri Korhonen, Senior Ministerial Adviser, tel. +358 50 318 8948, aku-petteri.korhonen(at)mmm.fi