Market Participants Signed Estonian Good Practice in Vertical Supply Chain of Food
On 31 May, the representatives of the commercial, food industry and agricultural companies signed the Estonian Good Practice in Vertical Supply Chain of Food. The good practice was developed in cooperation between the Food Industry Association, Traders’ Association and Chamber of Agriculture and Industry and their compilation was coordinated by the Estonian Chamber of Commerce and Industry.
The aim of the Estonian good practice of vertical supply chain of food developed as a result of years of cooperation between the Chamber of Commerce, Food Industry Association, Traders’ Association and Chamber of Agriculture and Industry is to increase honesty, trust and cooperation in business relations functioning in the food supply chain and ensure efficient functioning of the supply chain as a whole.
“The survey conducted by the Estonian Institute of Economic Research showed that 79 percent of the large Estonian food industry companies and 50 percent of smaller food producers have had to deal with dishonest commercial practices. Based on this feedback and the difficulties the food industry has had to face, we started to develop the Estonian good practice for the vertical supply chain as self-regulation three years ago. The regulations applicable in the European Union were too general due to which we wanted to create a more thorough document that would be a mandatory part of the cooperation agreements. We consider joining it to be very important for all parties, because it creates a basis for more honest business and increases the responsibility of all participants in the vertical supply chain where business risks are distributed more equally,” said head of the Estonian Food Industry Association Sirje Potissepp.
“The Traders’ Association actually has good trading practices in place and enforced since the year 2008, but only within the commercial sector. This document is a continuation and development of the already established good practice, because times have changed and updating is relevant. While the good practices document of our association focused mostly on relations with consumers and the relationship with the supplier was covered much more briefly with the good practice, the relations in the supply chain have been elaborated on. We believe that we do not have to regulate everything with the laws. Honest market participants can successfully agree on the rules of the game and respect them. Establishing good practices shows that if we work on something and cooperate, self-regulation is possible,” commented head of the Estonian Traders’ Association Nele Peil.
“Using dishonest commercial practices is a great risk for the development of Estonian agriculture and food production. Several surveys have shown that many Estonian food producers have had to face dishonest commercial practices. We hope that the good practices agreed on between the farmers, food industry and traders will help to decrease the use of dishonest commercial practices. The experience of other countries has shown that agreeing on good practices is important for improving relations between market participants and promoting honest trading practices, but we see that some issues related to the use of dishonest commercial practices should also be regulated with law,” said head of the Estonian Chamber of Agriculture and Commerce Roomet Sõrmus.
At the moment Selver, Rimi, Prisma, COOP and Maxima have joined the good practice initiative from the side of the Estonian Traders’ Association, the Association of Estonian Food Industry is represented by Salvest, Dava Foods Estonia, HKScan, Balbiino, Saarioinen and other 19 members of the Association, and Anu Ait, Eesti Pagar, Kaiu LT, Krootuse Agro, Kärla Põllumajandusühistu, Linnamäe Lihatööstus, Sagro, Wiru Vili, E-Piim Tootmine and Väätsa Agro from the side of the Estonian Chamber of Agriculture and Commerce. The list of all joined companies is available here.
The good practices are based on the 10 principles developed by 11 European organisations. Two additional principles were added to the Estonian document: equality and reasonability. Furthermore, the document has been updated with examples from Estonian producers, farmers and trade sector about good and dishonest practices that focus on the specific issues of the Estonian market.
To settle disputes arising from good practices, the parties to the dispute can turn to the conciliator working at the Chamber of Commerce if they have the respective agreement.
The associations welcome all companies participating in the food supply chain to join the good practice document and thereby give their contribution to creating honest competition!
The document on the Estonian good practice of the vertical supply chain is available here.