September 2024

by Ana-Maria Baciu and Cristina Stoica

A new bill, submitted to the Senate on September 17, 2024, by a group of 50 senators representing the entire political spectrum proposes significant changes to the legislation concerning competition and commercial practices. The primary goal of legislative proposal B459/2024 is to balance the relationship between large retailers and local producers while ensuring consumer protection by facilitating access to high-quality products.

According to the explanatory statement, the initiators of bill B459/2024 aimed to address four aspects raised by various local producers of consumer goods:

• Restricted consumer access to local products: the legislative initiative seeks to eliminate barriers to the sale of products made from natural ingredients by local producers.
• Sales manipulation: the proposal attempts to combat the uneven application of commercial markups on products within the same category, which could lead to sales manipulation in favor of products with lower markups.
• Temporary listing and delisting of local products: another key concern raised by the initiators is the limited and often low-visibility shelf space given to local products.
• Limited consumer access to “clean label” products: the legislative proposal advocate for unrestricted consumer access to additive-free products, responding to the growing market demand for such items.

The proposed legislative changes impact three key laws governing commercial relationships: Law No. 11/1991 on combating unfair competition, the Competition Law No. 21/1996, and Law No. 81/2022 on unfair commercial practices between businesses in the agricultural and food supply chain. These changes include:

• Expanding definitions: The bill introduces new definitions that risk enlarging the scope of certain legal provisions without clearly aligning them with the in-force laws. For example, the scope of Law No. 11/1991 would extend to protect consumers’ legitimate interests in their capacity of market participants, but it remains unclear how these provisions will be correlated with general consumer protection provisions (Law No. 363/2007 and Government Ordinance 21/1991 on consumer protection).
• New restrictions on unfair competition: examples include ‘unjustified limitations on the sale of a partner company’s products/services’, ‘applying higher markups to a partner company’s products/services compared to other products/services in the same category”, ‘refusing the partner company to provide it with relevant information on stocks or turnover of its products/services’, and ‘failure to comply with contractual clauses regarding payment, purchase, or supply’. These measures may infringe on free trade and limit businesses’ autonomy to set their own commercial policies.
• Repealing certain provisions: the bill proposes repealing provisions that explicitly exclude cases from the effects of Law No. 11/1991 when the acts fall under Law No. 21/1996, Law No. 81/2022, or Law No. 321/2009 on the sale of food products. It also seems to repeal the recently introduced provisions under Emergency Ordinance No. 84/2022, which addresses speculative actions during ‘periods of partial or total military mobilization, war, siege, or other crisis situations’. In absence of further clear explanations on how existing laws will be interpreted, this approach could create legislative inconsistency.
• Supplementing the Law No. 81/2022 with the concept of ‘food additives’ and the new prohibition for the purchaser ‘to refuse or to limit the listing and sale of additive-free food products’ could be interpreted as an unconditional obligation to list and market certain products, regardless of whether the listing requirements or the negotiated commercial terms are met. Without further clarification, this could create practical challenges.

Although it is still early to draw firm conclusions, hoping that the proposed measures are not just a political exercise in a pre-election context, and considering the dynamism of the continuously expanding consumer protection legislation, it is very important to note that without careful correlation of all the legal provisions in question and avoiding the use of vague or unclear terminology, the amendments set out in bill B459/2024 may lead to real conflicts of law enforcement.

Transparency and legislative coherence are the pillars of successful prevention and addressing the potential issues raised in practice. Without their rigorous application, the risk of generating more problems than solutions increases.

It remains to be seen whether, and how, this new legislative proposal will balance the relationship between retailers and local producers while ensuring a legal framework that safeguards all stakeholders across the production-distribution-consumption chain.