CJEU on the Sanctioning of Unfair Trading Practices in the Agricultural and Food Supply Chain
In its judgment of 29 January 2026 in Case C-311/24, the Court of Justice of the European Union (CJEU) ruled on the interpretation of Art. 6(1), first subparagraph, point (e) of Directive (EU) 2019/633. The matter concerned the question of how several payment requests made by a buyer to different suppliers are to be classified if they are not connected with the sale of the suppliers’ agricultural and food products.
The proceedings concerned four joined legal disputes between the Austrian Bundeswettbewerbsbehörde (Federal Competition Authority) and M. GmbH. According to specialist media reports, the anonymised company is said to be based on a Tyrolean food retailer. Since the main proceedings before the Austrian court are continuing, the procedural status must be taken into account; the CJEU judgment does not contain any final and binding finding regarding the allegations raised in the main proceedings.
Legal Background to the UTP Directive
Minimum Protection Against Unfair Trading Practices
Directive (EU) 2019/633 regulates unfair trading practices in business-to-business relationships in the agricultural and food supply chain. It is intended to create an EU-wide minimum standard in order to protect suppliers against certain practices by larger buyers.
Art. 3(1)(d) of the Directive requires Member States, in any event, to prohibit the practice whereby a buyer requires payments from the supplier that are not related to the sale of the supplier’s agricultural and food products. The Directive is based on minimum harmonisation. Member States may therefore, subject to the requirements of EU law, maintain or introduce stricter rules.
Implementation in Austria and Connection to German Law
In Austria, the UTP Directive was implemented in the second section of the Faire-Wettbewerbsbedingungen-Gesetz (FWBG, Austrian Fair Competition Conditions Act). The relevant prohibitive provision is § 5c(1) in conjunction with Annex I No. 4 FWBG. For infringements, § 6(2) FWBG provides for a fine of up to a maximum amount of EUR 500,000.
In Germany, implementation was carried out in the Agrarorganisationen- und Lieferketten-Gesetz (German Agricultural Organisations and Supply Chains Act). Although the CJEU judgment concerns Austrian law, it contains statements on the interpretation of the UTP Directive that may also be significant for understanding EU-law-based regulations in other Member States.
Facts of the Main Proceedings
Payment Requests to Suppliers
M. GmbH operates food retail stores in Austria. In May 2023, it sent payment requests to suppliers of agricultural and food products. In the view of the Bundeswettbewerbsbehörde, these were not connected with the sale of the products concerned and therefore infringed § 5c(1) in conjunction with Annex I No. 4 FWBG.
In the main proceedings, the company justified the payment requests by reference to economic burdens resulting from the COVID-19 pandemic, in particular in connection with effects on tourism, a lack of customers in food retail and significant cost increases. It also referred to a restructuring and transformation process within its business.
Supplier Day Conference and Pro Forma Invoices
On 16 May 2023, M. GmbH held an online “Supplier Day Conference”. According to the findings of the referring court, it presented to its suppliers, among other things, the market situation, its own burdens and the transformation process. The objectives stated included the professionalisation of category management and the optimisation of internal processes.
On the following day, the company sent emails to its suppliers. These contained a request to make a specifically quantified contribution to financing the transformation process. Pro forma invoices for lump-sum amounts of varying levels were attached to the emails.
According to the request from the Austrian court, the emails were essentially identical in wording. Differences existed in the amount of the respective pro forma invoice and as to whether the respective supplier had participated in the conference. According to the information in the main proceedings, the company later withdrew the requests for investment, cancelled the pro forma invoices and promptly repaid amounts already paid. In total, only two out of 16 suppliers are said to have paid.
Positions in the Austrian Proceedings
Applications by the Bundeswettbewerbsbehörde
The Bundeswettbewerbsbehörde took the view that M. GmbH, as buyer, had requested payments from 16 suppliers that were not connected with the sale of agricultural and food products. On 10 November 2023, it therefore filed 16 applications with the Oberlandesgericht Wien (Vienna Higher Regional Court) sitting as Kartellgericht (Cartel Court) for the imposition of a fine pursuant to § 6(2) FWBG.
Four of these applications were allocated to and joined by one panel division. They concerned payment requests to four suppliers that were based on pro forma invoices for lump-sum amounts of varying levels. In the view of the Bundeswettbewerbsbehörde, each payment request constituted a separate infringement.
Objections by M. GmbH
According to the information provided by the referring court, M. GmbH disputed that these could be separate applications. It argued that the same set of facts underlay the 16 applications. In its view, the splitting into 16 separate applications infringed the principle of ne bis in idem.
In the alternative, the company submitted that what was in fact alleged against it was a single and continuous infringement. This concept, known from antitrust and competition law, was also applicable to the FWBG.
Questions Referred by the Austrian Court to the CJEU
The Oberlandesgericht Wien had doubts as to whether treating the payment requests as a single infringement is compatible with Directive (EU) 2019/633. Under Austrian criminal-law doctrine, the conduct could be classified as a single act for the purposes of the statutory offence. This would mean that, despite 16 affected supply relationships, only one single fine up to the maximum limit of EUR 500,000 could be imposed.
In essence, the court wanted to know whether Art. 6(1)(e) of the Directive precludes a national rule under which payment requests addressed to different suppliers on the same day on the basis of a uniformly motivated decision of intent are deemed, in their entirety, to constitute a single infringement. The further question arose as to whether the national upper limit for the fine plays a role in this context.
Decision of the CJEU
Single Infringement Not Excluded in Principle
The CJEU first clarified that Art. 6(1), first subparagraph, point (e) of the Directive assigns to the Member States the power to impose, or initiate proceedings for the imposition of, fines and other equally effective penalties against the author of the infringement. In doing so, the provision refers to national rules and procedures.
In the Court’s view, the Directive contains no express rule as to whether several prohibited forms of conduct may be classified as a single infringement. Because of the minimum-harmonisation approach, it therefore remains, in principle, for the Member States to provide, or not to provide, for such classification.
The CJEU therefore held that Art. 6(1), first subparagraph, point (e) of the Directive does not, in principle, preclude national provisions under which several unfair trading practices prohibited under Art. 3(1) of the Directive may be classified together as a single infringement.
Limit: Effective, Proportionate and Dissuasive Penalty
However, the Court linked this statement to an important restriction. Under Art. 6(1), second subparagraph of the Directive, the penalty must be effective, proportionate and dissuasive, taking into account the nature, duration, recurrence and gravity of the infringement.
The national enforcement authority or the competent court must therefore have sufficient discretion to set a fine that satisfies these requirements. This also applies where several forms of conduct are treated together as a single infringement and only one fine can be imposed.
Significance of the Upper Limit of EUR 500,000
The CJEU also examined whether a national upper limit for the fine may be problematic under EU law. According to the decision, a fixed maximum limit is not excluded in itself. What matters is whether the competent court or the competent authority can, despite that limit, impose a penalty which is effective, proportionate and dissuasive in the specific case.
The Court pointed out that this may be doubtful in particular where the statutory maximum amount is significantly lower than the financial advantage that the buyer intended to obtain through the payment requests. In such a scenario, a single maximum fine for the totality of the conduct might not be sufficient to ensure the intended dissuasive effect.
According to the judgment, it is for the referring Austrian court to carry out this assessment in the main proceedings. In doing so, it must in particular take into account the amount of the intended financial advantage in relation to the statutory upper limit of the fine.
No Reliance on Ne Bis in Idem to Limit the National Rule
The CJEU also addressed the principle of ne bis in idem. This principle prohibits the duplication of proceedings and penalties against the same person for the same acts.
According to the Court’s decision, application of this principle requires identity of the material facts. If factual situations are not identical but merely similar, the principle does not apply. In the case of unfair trading practices directed at different suppliers, this requirement of identity is generally lacking.
In the CJEU’s view, classification under national law as a single infringement does not alter this. The scope of protection under EU law derived from Art. 50 of the Charter of Fundamental Rights of the European Union cannot depend on how a Member State legally characterises the act.
Distinction from the Single and Continuous Infringement in Competition Law
The CJEU also clarified that the concept of a single and continuous infringement, known from the case-law on Art. 101 TFEU (Treaty on the Functioning of the European Union), is not decisive in the context of Directive (EU) 2019/633. The Directive is based on Art. 43(2) TFEU and serves the common agricultural policy, not the competition rules of the Treaty.
The concept of a single and continuous infringement was developed in competition law in particular in order to attribute conduct within the framework of an overall plan. According to the CJEU, this logic is not transferable to the question to be assessed here, namely whether several similarly directed unfair trading practices may be aggregated under national sanctions law.
Key Points of the Judgment
The decision can be summarised in several points:
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Directive (EU) 2019/633 provides for minimum protection against unfair trading practices in the agricultural and food supply chain.
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Art. 3(1)(d) of the Directive covers payment requests made by the buyer that are not connected with the sale of the supplier’s agricultural and food products.
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Several simultaneous payment requests to different suppliers may, in principle, be treated as a single infringement under national law.
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A single fine is not excluded under EU law if it can be effective, proportionate and dissuasive.
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The competent national court must examine whether the statutory maximum limit leaves sufficient discretion in the specific case.
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The principle of ne bis in idem does not require several unfair trading practices directed at different suppliers to be mandatorily treated as one and the same act.
Classification for Companies in Supply Chains
The judgment directly concerns sanctions practice in the case of prohibited payment requests in the agricultural and food supply chain. It makes clear that the assessment under EU law does not depend solely on whether national law classifies several acts as a single unit. What remains decisive is whether the penalty ultimately complies with the requirements of the Directive.
For companies with business relationships with agricultural producers, food manufacturers or intermediaries, the decision may be relevant beyond the specific Austrian case. The requirements of the UTP Directive are linked to the structure of the supply relationship, turnover sizes and the type of trading practice. National implementations may differ in detail, but must maintain the minimum standard required under EU law.
The decision also comes in the context of further proceedings under the FWBG. According to publicly available reports, the Austrian Bundeswettbewerbsbehörde is conducting similar proceedings against other companies as well, in which, according to the authority, they are accused, among other things, of bonus demands for a digital expansion of stores and late payments to fruit growers; these allegations have not yet been confirmed, the proceedings have not been finally and bindingly concluded, and the presumption of innocence applies. In this respect too, the specific procedural status must be taken into account in each case.
Frequently Asked Questions
CJEU C-311/24: May Several Payment Requests Be Treated as One Infringement Under the UTP Directive?
Yes, the CJEU considers this possible in principle. The prerequisite is that the competent authority or competent court can nevertheless impose an effective, proportionate and dissuasive fine.
Art. 3(1)(d) Directive (EU) 2019/633: Which Payment Requests Are Prohibited?
Covered are requests by a buyer to a supplier that are not connected with the sale of the supplier’s agricultural and food products. In the main proceedings, the case concerned pro forma invoices for lump-sum amounts to support a transformation process of the buyer.
CJEU Judgment on FWBG Fines: What Practical Consequences Can the Decision Have for Companies?
The decision emphasises that a national fine must remain effective, proportionate and dissuasive even in the case of aggregated infringements. Companies in agricultural and food supply chains must therefore expect courts to include the intended financial advantage and the gravity of the infringement in the assessment.
Legal Questions Concerning Unfair Trading Practices
The CJEU’s decision shows that the sanctioning of unfair trading practices in supply chains requires a precise assessment of the European and national regulatory framework. MTR Legal Rechtsanwälte advises companies, investors and high-net-worth private individuals on issues of competition law and related areas of commercial law. If you have legal questions concerning trading practices, supply relationships and administrative proceedings, you can find further information at legal advice in competition law.
