Improved bargaining position of pig farmers following Vion’s commitment

The Netherlands Authority for Consumers and Markets (ACM) has received a commitment from Vion that it will no longer unilaterally alter contracts with pig farmers. Vion commits, going forward, to alter contracts with pig farmers only if the pig farmer in question agrees to that. With this commitment, the pig farmer’s bargaining position improves, which is in line with the objective of the Dutch Act regarding unfair trading practices in the agricultural and food supply chain. In December 2023, the draft commitment decision was published. ACM has accepted this commitment, and has now declared it binding. ACM’s investigation into a possible violation of the Act by Vion has been suspended.

Bargaining positions of pig farmers

Vion is a meat and meat-alternatives producer, and has contracts with pig famers. These contracts contain the conditions and price structures under which Vion buys pigs from pig farmers. Following an investigation, ACM found that the provisions in these contracts were at odds with the Dutch Act regarding unfair trading practices in the agricultural and food supply chain. This Act is aimed at strengthening the bargaining positions of food suppliers vis-à-vis buyers.

As a result of the commitment, Vion can no longer alter a contract without the approval of the pig farmer in question. In addition, pig farmers have the ability not to accept a new contract, without the risk of Vion canceling the agreement straight away. Moreover, pig farmers that do not accept the new contracts are not required to adhere to the one-year notice period. However, Vion itself is still bound to that one-year notice period. ACM is of the opinion that this commitment strengthens the bargaining positions of pig farmers.

POV, the producer organization of Dutch pig farmers, had filed three complaints with ACM about Vion. Two of them have been included in the commitment decision. POV shared its concerns regarding the fact that compensations are not part of the commitment decision. ACM points out that the civil courts or the Complaints Boards are the appropriate bodies when seeking compensations. POV’s third complaint is about the calculation of subsequent payments to pig farmers. ACM dismissed this complaint, because ACM did not find any indications of unfair trading practices.

The Dutch Act regarding unfair trading practices in the agricultural and food supply chain

The Act came into effect on November 1, 2021. The purpose of the Act is to strengthen the bargaining positions of farmers, growers, and fishermen vis-à-vis larger and concentrated market participants. Besides unilateral changes to contracts (which this commitment refers to), other unfair trading practices have been included in the Act. A quantative study of ACM has revealed that many buyers are still not familiar with the Act. The study also reveals that most buyers say they come across few unfair trading practices in their sectors. However, this is not the case for all trading practices, for example cancelling orders on short notice. ACM seeks to promote compliance with the Act through communication and enforcement.

If you as a supplier see that one of your buyers does not comply with the rules, please file a report with us.