The Draft Law on Trading Practices for Certain Types of Products (the “Draft Law”) is currently subject to public consultation. Its primary objective is to establish a more balanced framework for commercial relationships between buyers (in particular large retail chains) and suppliers within the supply chain.

The proposed regulation introduces detailed rules on permitted and prohibited trading practices, as well as new supervision and enforcement mechanisms to be implemented by the Commission for Protection of Competition (the “Commission”).

The Draft Law also forms part of Serbia’s alignment with EU rules on unfair trading practices in the agricultural and food supply chain.

Key Novelties

• Introduction of a specific regulatory framework governing relationships between buyers and suppliers of certain products
• Prohibition of a range of unfair trading practices, including late payments and unilateral amendments of contractual terms
• Introduction of maximum payment periods of 30 days for perishable products and 60 days for other products
• Granting broad investigative and enforcement powers to the Commission
• Obligation for businesses to align contracts and business practices within 4 months from the entry into force

1. Subject Matter and Scope of the Draft Law

The Draft Law governs commercial relationships between buyers and suppliers in connection with the trade of:

• agricultural products,
• food products, and
• products of particular importance for market supply.

Its purpose is to prevent practices arising from a significant imbalance in bargaining power between large buyers and economically dependent suppliers, which may result in the imposition of unfavorable business terms.

2. Payment Terms

The Draft Law introduces strict rules regarding payment deadlines:

• up to 30 days for perishable agricultural and food products;
• up to 60 days for other agricultural and food products.

Agreeing on or making payments beyond these deadlines is deemed an unfair trading practice and is prohibited irrespective of the circumstances of the individual case.

3. Prohibited Trading Practices

The Draft Law provides for a list of prohibited practices, including:

• unilateral modification of key contractual terms (e.g. price, quantity, delivery deadlines);
• charging fees unrelated to the sale of the supplier’s products;
• short-notice cancellation of orders for perishable products;
• unjustified transfer of commercial risk to the supplier.

Such practices are considered unacceptable as they create a significant imbalance in the rights and obligations of the contracting parties and shift economic risk to the weaker party.

4. Fees and Additional Services

The Draft Law further regulates various fees that buyers may charge suppliers, including:

• storage fees,
• product display fees, and
• listing fees for inclusion of products in the assortment.

Such fees are permissible only if they are:

• agreed in advance,
• based on actual costs, and
• proportionate and transparent.

5. Supervision and Enforcement

The Commission is entrusted with enforcement of the Draft Law, including:

• initiating proceedings to determine the existence of unfair trading practices;
• conducting investigations and collecting evidence;
• imposing administrative measures and financial penalties.

Among other powers, the Commission may order the cessation of the contested practice and require market participants to align their general terms and standard agreements with the law.

6. Proceedings and Initiatives

Proceedings before the Commission may be initiated upon the initiative of:

• suppliers,
• producers’ associations,
• other business entities,
• public authorities or other interested parties.

The Commission is required to inform the initiating party of the outcome of its assessment within 60 working days.

7. Practical Implications for Businesses

If adopted in its current form, the Draft Law will require companies participating in the supply chain- particularly retailers, distributors and large buyers, to:

• review existing supplier agreements;
• reassess rebate and fee structures;
• align payment deadlines with statutory limits;
• adjust internal procedures and standard contractual templates.

The Draft Law provides for a four-month transition period following its entry into force for businesses to align their practices with the new requirements.

For additional information or a legal assessment of how the Draft Law may affect your business operations, please feel free to contact our team.