The article discusses the legal and ethical foundations necessary to prevent unfair trading practices in Latvia's agricultural and food production sectors. It stresses the importance of maintaining fair and transparent relationships between buyers and suppliers to ensure customer trust and timely delivery of quality goods.

Since November 1, 2021, the Unfair Trading Practices Prohibition Law (NTPAL) has been in effect, applying to all participants in the agricultural and food supply chain, including retailers, processors, wholesalers, cooperatives, and individual producers. The law outlines 16 strictly prohibited unfair trading practices (the 'black list') and 5 additional practices that are banned under specific conditions (the 'grey list').

The black list includes prohibited payments that buyers may demand from suppliers, such as fees unrelated to the sale of goods. For example, if a buyer opens a new store and requires suppliers to pay a fee for their products to be included, this is considered an unfair practice.

Competition law advisors must ensure their clients in the agricultural and food sectors are aware of these regulations to avoid prohibited practices. Advisors should guide businesses in establishing clear, compliant contracts and promote ethical trading standards to foster fair competition and avoid legal repercussions.

Effective communication is crucial; buyers must inform suppliers promptly about any issues that could delay order fulfillment. For instance, if a delivery is scheduled for Friday, buyers can only change their order until Tuesday of that week. If an order is no longer needed, buyers must notify suppliers at least 30 days in advance.

Buyers cannot shift their responsibilities onto suppliers. For example, if a box of chocolates is lost in the buyer's warehouse, the buyer cannot demand compensation from the supplier. Similarly, if a buyer over-orders seasonal flower seeds, they cannot charge the supplier for storage costs.

Additionally, buyers cannot request payment for advertising or logistics unless there is a prior written agreement. If a buyer miscalculates their order and cannot sell promotional items, they cannot demand the supplier apply promotional pricing to leftover stock without prior agreement.

The article emphasizes the importance of maintaining a balance between services provided and contributions of collaboration partners, particularly in logistics. Ethical behavior is highlighted as a key priority in partnerships, referencing NTPAL regulations that mandate fair cooperation.

The principle of good faith in transactions includes transparency, timely fulfillment of obligations, mutual respect, and a willingness to resolve conflicts. This principle is crucial for fostering trust and equal market conditions.

However, suppliers often face delays in responses from buyers after notifying them of price increases due to raw material costs, leading to financial losses. Advisors should encourage clients to establish clear communication protocols and fair negotiation practices to mitigate risks associated with non-responsiveness.

The article suggests practical steps for businesses, including clear contract policies and written agreements to prevent disputes. It also emphasizes the importance of implementing contract management tools to enhance transparency in supply chain processes.

Competition law advisors should note the emphasis on establishing internal compliance rules and training employees about unfair trading practices. Companies are encouraged to create mechanisms for reporting potential issues and conduct regular internal audits.

Finally, the article advocates for a 'win-win' approach, stressing that long-term trust and integrity are more valuable than short-term gains achieved through unfair methods. Advisors should guide businesses in fostering these principles to ensure compliance with competition laws and maintain healthy supplier relationships.