April 2026 – Relatively recent enforcement activity of the Serbian Commission for Protection of Competition (the “Commission”) has brought renewed attention to buyer and supply relations in shaping market outcomes.
With the aim of strengthening the principle of contractual equality and further aligning Serbian legislation with the EU acquis - in particular Directive (EU) 2019/633 on unfair trading practices in the agricultural and food supply chain (the “EU Directive on Unfair Trading Practices”), Serbian Government adopted the Draft Law on (Unfair) Trading Practices (the “UTPL”) before the Serbian Chamber of Commerce. The draft will subsequently proceed to the National Assembly of the Republic of Serbia for adoption.
Background
Several critical developments in the FMCG sector created the context for the introduction of the UTPL. Namely, in 2024, rising food prices prompted the Commission to initiate a sector inquiry into key food supplies in Serbia. In October 2024, the Commission raided the four largest retail chains following allegations of cartel activity in the sector. Soon after, Serbian Government implemented an ordinance that fixes margins for the retail sector. In February 2026, a key retailer initiated an investment arbitration against Serbia in relation to regulatory measures implemented by the government. Against the backdrop of these developments, Serbian Government has proposed the new UTPL.
What does the UTPL bring?
Entities subject to the UTPL will be required to align their general terms and conditions, contracts, internal guidelines, and business practices with the provisions of the UTPL no later than four months after its entry into force. Key elements of the UTPL are as follows.
⇒ Application of UTPL – To whom and to what?
The UTPL applies to commercial relations between suppliers and buyers engaged in trade within the territory of the Republic of Serbia. In this context, as explained in the associated explanatory note to the UTPL, a “supplier” means any agricultural producer, whether a natural or legal person, including their organisations or associations, that sells agricultural or food products. On the other hand, a “buyer” is any legal person or entrepreneur who, in the course of their business activities, purchases such products for the purpose of resale, processing, or distribution.
With regard to its scope, the UTPL targets only those unfair trading practices arising in contractual relationships characterised by a significant imbalance in bargaining power. The existence of such an imbalance is subject to a rebuttable presumption, based on the disparity between the total annual turnover of the buyer and that of the supplier. Unfair trading practices are particularly harmful to small and medium-sized enterprises in the agricultural and food supply chain. Larger companies with an annual turnover not exceeding EUR 350 million are also protected against such practices.
From a product perspective, UTPL application is limited to trade in agricultural and food products, as well as products deemed to be of particular importance for market supply. The final list of covered products will be determined by the government through secondary legislation. It is expected that the list will be similar to the list referred to in the EU Directive on Unfair Trading Practices, which includes, inter alia, dairy products, fruit and vegetables, cereals, oils and fats, sugar, cocoa, beverages, and various processed agricultural products, covering the entire value chain.
⇒ Which contractual practices are prohibited?
The UTPL expressly prohibits the use of vague, indeterminate, or conditional contractual clauses in agreements between buyers and suppliers and introduces a general obligation that such agreements be concluded in written form.
Furthermore, it sets out a list of unfair trading practices that are prohibited in all circumstances, regardless of any justification or surrounding context, the so-called “black-list clauses”. These prohibited practices are largely transposed from the EU Directive on Unfair Trading Practices and include, inter alia, excessive payment periods, cancellation of orders for perishable products at short notice, unilateral modification of contractual terms, and the imposition of unjustified charges on suppliers that would ordinarily be borne by the buyer.
In addition, the UTPL introduces “grey-list clauses”, which consist of practices that are presumed to be unfair unless proven otherwise. These include requirements imposed on suppliers to pay for storage, the return of unsold products, promotional activities, advertising, or order reductions.
The UTPL also explicitly prohibits commercial retaliation, as well as threats of retaliation, against suppliers who seek to exercise their statutory or contractual rights. Unlike the EU Directive on Unfair Trading Practices, the UTPL classifies commercial retaliation as a “particularly severe form of unfair trading practice”. Such retaliation may take various forms, including removing a supplier’s products from the buyer’s assortment or promotions, reducing or delaying orders, or suspending services normally provided to the supplier, such as marketing or product placement. It also includes any other conduct that may directly affect the supplier’s business. Importantly, the UTPL treats as a serious infringement not only actual retaliation, but also any statement, act, or omission by the buyer that explicitly or implicitly signals adverse consequences if the supplier exercises its rights or refuses certain conditions.
All provisions of the UTPL are mandatory in nature. Contracting parties may not exclude or limit its application through contractual arrangements.
⇒ Is the Commission getting a new role?
The Commission, which is traditionally tasked with safeguarding market competition and consumer welfare, will be assigned a new role - it will be the enforcing agency under the UTPL. Thus, for the first time since the introduction of the modern competition regime in Serbia, the Commission’s jurisdiction is being expanded.
The UTPL grants the Commission the authority to determine the rights and obligations of participants in the supply chain, impose administrative measures, monitor compliance with imposed measures, and maintain a register of buyers found to have engaged in unfair trading practices.
Proceedings before the Commission may be initiated by any person through a written submission describing the alleged infringement. In addition, the Commission may initiate proceedings ex officio. The examination of alleged unfair trading practices is conducted through a formal investigative procedure. Such proceedings constitute administrative proceedings with full jurisdiction. The Commission acts as the authority, while the buyer possessing significant bargaining power is treated as a party to the proceedings. The affected supplier is granted the status of an interested party, with the right to be informed of the progress of the proceedings.
The burden of proof differs depending on the type of practice at issue. In cases involving black-listed practices, the burden rests with the buyer, whereas in grey-listed cases, the burden lies with the Commission.
In the course of evidence gathering, the Commission may rely on investigative tools similar to those used in competition law enforcement, including unannounced inspections, hearings of parties and interested persons, oral hearings, expert examinations, and other necessary procedural actions.
⇒ What are the consequences of engaging in unfair trading practices?
Where the existence of prohibited trading practices is established, the Commission is empowered to impose a range of measures, which must be proportionate to the gravity, scope, and duration of the infringement.
The least severe measures include interim measures and compliance measures, which may require the temporary cessation of the suspected practice or the alignment of general terms and conditions, standard contracts, or specific contractual provisions deemed to be unfair.
The UTPL also provides for monetary measures aimed at protecting against unfair trading practices and restoring balance in negotiations between trading partners. These measures take the form of financial payments calculated as 0.1% of the buyer’s total annual turnover generated in the territory of Serbia in the year preceding the initiation of proceedings, subject to adjustment based on mitigating or aggravating circumstances. The collected amounts are paid into the state budget.
Additionally, buyers may be subject to procedural penalties in the form of daily fines for failure to comply with the Commission’s requests or orders, including failure to submit requested information or documentation.
⇒ How will these legislative changes affect the market and existing commercial relationships?
From the perspective of buyers, in particular large retail chains and other entities on the procurement side, the new regime will require a comprehensive review of existing contractual arrangements, as well as internal policies, general terms and conditions, framework agreements, and contractual standards incorporated into distribution agreements. While a transitional period for compliance is expected following the adoption of the UTPL, the adjustment process is likely to prove challenging for many buyers, given the prevalence of entrenched commercial practices that may no longer be permissible.
From the perspective of suppliers, particularly small and agricultural producers, the UTPL is expected to provide a higher degree of legal certainty and predictability in commercial relations. By limiting the use of vague contractual clauses, prohibiting unilateral amendments, and explicitly restricting practices such as unjustified fees, delayed payments, and commercial retaliation, the new framework strengthens suppliers’ negotiating position and reduces exposure to practices that have historically been difficult to challenge.
Nevertheless, considering the enforcement mechanisms and financial exposure introduced by this new draft legislation, including monetary measures that may reach significant amounts depending on annual turnover, it is reasonable to expect a level of compliance comparable to that observed in the field of competition law. At the same time, the UTPL signals a broader shift towards a more interventionist regulatory approach, extending competition-related enforcement beyond traditional antitrust and merger control.