Unfair trading practices in the food chain

This Chapter explores the multifaceted concept of unfair trading practices (UTPs) in agricultural markets, analyzing their theoretical foundations, policy implications, and empirical assessments. It conceptualizes UTPs as manifestations of power asymmetries within agrifood value chains and complex transactions. The study applies bargaining theory to highlight the subjectivity of fairness, market incentives to fairness and the challenges in defining and regulating UTPs. The policy analysis evaluates the effectiveness of both direct (e.g., EU Directive 2019/633) and indirect policy measures (e.g., producer organizations), and addresses issues of enforcement, regulatory design, unintended consequences, and pass-through of unfairness to third parties. Empirical evidence is reviewed to identify the occurrence and impact of UTPs. The findings underscore the complexity of addressing UTPs through legal and economic frameworks and suggest directions for future research and policy innovation.