Combating excessive increases in agricultural and food prices

Emergency Ordinance No 67/2023 on the introduction of a temporary measure to combat the excessive increase in the prices of certain agricultural and food products was published in the Official Gazette, Part I, No 602 of 30 June 2023.

 

Please note that the new provisions will apply from 30 July 2023.

 

Aspects that led to the appearance of this emergency ordinance:

 

  • processed food prices have consistently and broadly accelerated their pace of increase throughout 2022, amid developments in energy and agri-food commodity markets;
  • during 2022, all the main food staples, such as sugar, oil, potatoes, milk, eggs, meat, bread, vegetables, fruit, have recorded significant price increases, which are still continuing and causing distortions on the agricultural and food markets, with a major negative impact on the level of consumption and purchasing power of final consumers, affecting the food safety and security of the population;
  • during 2023, in February, the consumer price indices for the main food commodities, published by the National Institute of Statistics, signaled price increases compared to December 2022 and January 2023;
  • in order to ensure food for the population, maintain and increase the number of jobs and ensure food security, it is necessary to regulate these issues without delay and taking into account that the non-promotion of this normative act as a matter of urgency may have a negative impact on the purchasing power of the population, its health and implicitly on producers by decreasing market demand, interrupting existing contracts and projects.

 

OUG 67/2023 introduces a temporary measure for the agriculture and food industry sector in order to combat the excessive increase in prices of some agricultural and food products.

 

Please note that the temporary measure to combat excessive price increases applies to all economic operators registered in Romania, regardless of their form of organisation, throughout the chain of production, import, intra-Community trade, distribution and retailing, for the agricultural and food products listed in the annex below.

 

 

ANNEX: LIST of agricultural and food products:

 

  1. Plain white bread weighing between 300-500 grams, without specialities
  2. Drinking cow’s milk 1 l, fat 1.5%, except UHT
  3. Bulk cow’s milk cheese
  4. Plain cow’s milk yoghurt, 3.5% fat, maximum 200 grams
  5. White wheat flour “000” 1 kg
  6. Malt 1 kg
  7. Chicken egg, M calibre 10 pcs.
  8. Sunflower oil 1 l
  9. Fresh chicken meat (Chicken meat, in application of this emergency ordinance, means: whole chicken, chicken breast, whole chicken thighs with bone and chicken wings, standard version)
  10. Fresh pork meat (Pork meat, in application of this emergency ordinance, means: pork meat, bone-in and boneless pork meat, pork shoulder)
  11. Bulk fresh vegetables (Bulk fresh vegetables, in application of this emergency ordinance, means: tomatoes, onions, cucumbers, dried beans, carrots, bell peppers, white peppers and capias).
  12. Fresh fruit in bulk (Fresh fruit in bulk, in application of this emergency ordinance, means red and golden apples, plums, watermelon, table grapes).
  13. Fresh white potatoes in bulk
  14. White raw sugar 1 kg

 

 

According to OUG 67/2023, the temporary measure to combat excessive price increases consists of limiting the trade surcharges for the products listed in the Annex, as follows:

  • the commercial mark-up applied by the processor is a maximum of 20% of the production cost of the product, calculated according to the accounting regulations in force, i.e. Accounting Law no. 82/1991, including direct and indirect expenses;

 

  • the commercial mark-up applied cumulatively throughout the distribution chain, regardless of the number of distributors in the chain, is a maximum of 5% of the purchase price plus operating expenses;

 

  • the share of the commercial mark-up charged by the trader for retail and cash & carry sales is a maximum of 20% of the purchase price, plus the trader’s direct and indirect expenses; the share of the commercial mark-up of a maximum of 20% shall also include the discounts and rebates provided for in Article 3, paragraph 6 of Law no. 81/2022 on unfair commercial practices between enterprises in the agricultural and food supply chain.

 

The marketing of the products listed in the Annex, during the period of application of OUG 67/2023, is made only with the presentation of proof by the economic operators of the value of the commercial addition applied to the products sold.

 

It is important to note that the commercial additions are applied to the value without VAT of the agricultural and food products listed in the Annex.

 

The commercial contracts currently in force, whose terms and conditions are contrary to the provisions of this Emergency Ordinance, will be amended accordingly, within 30 days from the date of entry into force of this normative act.

 

The units issuing meal, gift and social vouchers, including those issued through the Support for Romania Programme, regardless of the method by which the vouchers are issued, electronic or paper, and regardless of their type, may apply to the merchants at the time of their settlement a commission of maximum 1%.

 

Failure by processors, distributors or retailers to comply with the commercial mark-up rates provided above constitutes an offence, unless it has been committed under such conditions that, according to criminal law, it constitutes a criminal offence.

 

The contravention is punishable by a fine from 100,000 lei to 2,000,000 lei.

 

According to Article 3, paragraph 6 of Law no. 81/2022, the buyer is prohibited from applying financial and commercial discounts in the form of rebates, except for discounts and rebates, whose cumulative discounts shall not exceed 20%, applied according to the value invoiced between the buyer and the supplier, for agricultural and/or food products, by way of derogation from the provisions of Law no. 227/2015, as amended and supplemented.

 

The marketing of the products listed in the Annex, during the period of application of OUG 67/2023, is made only with the presentation of proof by the economic operators of the value of the commercial addition applied to the products sold.

 

It is important to note that the commercial additions are applied to the value without VAT of the agricultural and food products listed in the Annex.

 

The commercial contracts currently in force, whose terms and conditions are contrary to the provisions of this Emergency Ordinance, will be amended accordingly, within 30 days from the date of entry into force of this normative act.

 

The units issuing meal, gift and social vouchers, including those issued through the Support for Romania Programme, regardless of the method by which the vouchers are issued, electronic or paper, and regardless of their type, may apply to the merchants at the time of their settlement a commission of maximum 1%.

 

Failure by processors, distributors or retailers to comply with the commercial mark-up rates provided above constitutes an offence, unless it has been committed under such conditions that, according to criminal law, it constitutes a criminal offence.

 

The contravention is punishable by a fine from 100,000 lei to 2,000,000 lei.

 

OUG 67/2023 applies for a period of 90 days from the date of its entry into force, i.e. from 30 July to 28 October 2023.

 

 

Legal basis:

– OUG 67/2023 on the introduction of a temporary measure to combat the excessive increase in the prices of certain agricultural and food products;

– Law 81/2022 on unfair trade practices between enterprises in the agricultural and food supply chain.