Rules to make the food supply chain fairer and more transparent

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1. The law applies to commercial relations between all operators in the food chain, from production to distribution. Transport, hospitality and deliveries by members to their cooperatives are excluded.
2. Food contracts must be put in writing before performance begins, and must include at least the parties, the subject matter, the price, payment and delivery terms, duration and grounds for termination. If payment is made in cash on delivery, an invoice is enough.
3. Changing contract terms without the parties' agreement and charging extra payments beyond the agreed price are banned, except in two specific cases agreed in writing. Demanding commercially sensitive information is limited, and brand management is regulated to prevent unfair practices.
4. The law creates a Code of Good Commercial Practices in Food Contracting, with voluntary adherence, and a State Register of operators that join. It also creates the Food Chain Observatory, which monitors prices and practices and sends an annual report to the Cortes Generales (Spanish Parliament).
5. Violations are punished with fines: up to €3,000 for minor offenses, between €3,001 and €100,000 for serious ones, and up to €1,000,000 for very serious ones. The operator with greater economic power is presumed, unless proven otherwise, responsible for failing to put the contract in writing.
6. The Olive Oil Agency becomes the Food Information and Control Agency, which monitors compliance with the law and inspects operators. The law also reforms agri-food interprofessional organizations and standard contracts.

Who it affects

• Farmers, livestock breeders, fishers and foresters: They must have written contracts and can join the good practices code.
• Food industry and distribution: They cannot impose unilateral changes or extra payments, and face fines if they break the rules.
• Agricultural cooperatives: Deliveries by members required by their bylaws fall outside the law.
• Consumers: The law seeks more price transparency and better food information.

Words worth knowing

Cadena alimentaria (food chain)

The set of activities of production, processing and distribution of food. It does not include transport or hospitality.

Operador (operator)

A person or company carrying out any economic activity in the food chain.

Contrato de integración (integration contract)

A contract where one party supplies products and technical direction and the other provides land and facilities to complete production.

Información comercial sensible (commercially sensitive information)

Non-public technical knowledge about a product, its manufacture or its marketing.

PYME (SME)

Small and medium-sized enterprise.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries