When The Power Is With You #II: Won't You Also Be Affected By The New Obligations Resulting From The Amendment To The SMPA?

• Published date: 08 January 2024
• Subject Matter: Consumer Protection, Food, Drugs, Healthcare, Life Sciences, Consumer Trading & Unfair Trading, Food and Drugs Law
• Law Firm: Havel & Partners s.r.o.
• Author: Ivo 'imeček and Tereza Kuskov'

When the former version of the SMPA was in force, virtually only the operators of food retail chains had significant market power. The amendment to the SMPA, which takes full effect on January 1, 2024, has substantially broadened the scope of companies affected and the group of products subject to the regulation. In this episode, we will focus on these changes. From now on, it is no longer sufficient to look for (market) power only in cheese, but also, for example, in fresh cut flowers.

A simple comparison shows the extent of these changes.

The previous legislation focused on buyers of food products by final retailers whose turnover from food sales in the Czech Republic exceeded CZK 5 billion. In practice, therefore the law applied only to eight specific entities. Until recently, they had to comply with the SMPA rules in relation to all their food suppliers.

Following the amendment, buyers of food and agricultural products at any level of the supplier-buyer relationship may infringe the SMPA in the form of unfair commercial practices. This applies even if the turnover of the buyer is considerably lower than the aforementioned CZK 5 billion (in addition to the turnover generated not only by food sales and not only on the territory of the Czech Republic).

On the other hand, the turnover of the supplier in question is now also decisive in determining whether the contractual relationship with a particular supplier falls under the SMPA. This means that with some suppliers the buyer has to comply with the obligations of the SMPA, while with others it does not. But let's take this step by step.

From farm to fork

Firstly, the amendment to the SMPA extends the scope of the Act to the entire agricultural and food vertical.

It has not changed the fact that only buyers have special obligations under the SMPA. However, these may now include food manufacturers, food brokers, producers, wholesalers and many more. In addition, the SMPA may now also impose obligations on companies in the HORECA sector (hotels, restaurants, cafés and catering), hobby markets or petrol station operators.

All they need to do is be buying food or agricultural products. And that is a rather broad definition. First of all, it includes all the items listed in Annex 1 of the Treaty on the Functioning of the EU (this is the list of agricultural products covered by the EU's common agricultural policy, the terminology referring to the customs nomenclature). In addition to particular foodstuffs...