Today, on 31 May, representatives of the retail, food industry and agricultural sectors held a formal signing ceremony for the Estonian Good Practices in the vertical food supply chain. The Good Practices were drawn up jointly by the Food Industry Association, the Merchants' Association and the Chamber of Agriculture and Commerce, with the work coordinated by the Estonian Chamber of Commerce and Industry.
The Estonian Good Practices in the vertical food supply chain, the result of years of cooperation between the Chamber of Commerce and Industry, the Food Industry Association, the Merchants' Association and the Chamber of Agriculture and Commerce, are intended to strengthen honesty, trust and cooperation in business relationships across the food supply chain and to ensure the chain operates efficiently as a whole.
"A 2015 study by the Estonian Institute of Economic Research showed that as many as 79% of Estonia's large food industry companies and 50% of smaller food producers had encountered unfair trading practices. Based on that feedback and the difficulties faced by food producers, three years ago we launched a self-regulatory effort to draft Estonian Good Practices for the vertical food supply chain. The applicable EU regulations were too general, so we wanted to create a more thorough document that could be made a binding annex to cooperation agreements. We see all parties signing on to this as very important, because it lays the foundation for fairer business conduct and increases the responsibility of every participant in the food supply chain, with business risks shared more evenly," said Sirje Potisepp, head of the Estonian Food Industry Association.
"The Merchants' Association already has Good Trade Practices in place, adopted back in 2008, but only within the retail sector. For us, this new document is a continuation and evolution of our existing practices, since time has moved on and an update is in order. Our previous Good Practices focused more on relationships with consumers, and supplier relations were covered only briefly, whereas now relationships across the supply chain are also extensively addressed. We believe not everything needs to be regulated by law. Honest market participants can agree on the rules of the game among themselves and stick to them. Adopting the Good Practices shows that with effort and cooperation, self-regulation is possible," commented Nele Peil, head of the Estonian Merchants' Association.
"The use of unfair trading practices is a threat to the development of domestic agriculture and food production. Several studies have shown that a large share of Estonian food producers have encountered unfair trading practices. We hope the Good Practices agreed by farmers, food producers and retailers will help reduce the use of unfair trading practices. Experience from other countries shows that agreeing on good practices is important for improving relations between market participants and promoting fair trading practices, but we also see that some issues related to unfair practices need to be regulated by law as well," said Roomet Sõrmus, head of the Estonian Chamber of Agriculture and Commerce.
As of today, the signatories from the Merchants' Association include Selver, Rimi, Prisma, COOP and Maxima; from the Food Industry Association, Salvest, Dava Foods Estonia, HKScan, Balbiino, Saarioinen and 19 other members; and from the Chamber of Agriculture and Commerce, Anu Ait, Eesti Pagar, Kaiu LT, Krootuse Agro, Kärla Põllumajandusühistu, Linnamäe Lihatööstus, Sagro, Wiru Vili, E-Piim Tootmine and Väätsa Agro. The full list of participating companies is available here.
The Good Practices are based on 10 core principles developed by 11 European organisations. The Estonian document adds two further principles: equality and reasonableness. The document is also supplemented with examples from Estonian producers, farmers and the retail sector covering both good and unfair practices, focusing on issues specific to the Estonian market.
To resolve disputes arising from the Good Practices, the parties to a dispute may, where they have agreed to do so, turn to the mediator operating at the Chamber of Commerce and Industry.
The associations call on all companies in the food supply chain to sign on to the Good Practices and contribute to creating fair competition!
The Estonian Good Practices in the vertical food supply chain document is available here.
Photos from today's signing ceremony are here.
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