The BCA issued an informal opinion on whether competition law precludes the partners of the Belgian Agro Food Chain Platform from including a commitment in their Code of Conduct according to which they may not contractually exclude the theory of change of circumstances (imprevisieleer / théorie de l’imprévision).
The partners of the Belgian Agro Food Chain Platform (BEMEFA, AGROFRONT (BOERENBOND, ABS and FWA), FEVIA, UNIZO, UCM and COMEOS) have taken the initiative to implement a Code of Conduct to promote fair relations between suppliers and purchasers. They now intend to include a commitment in their Code of Conduct that they will not contractually exclude the theory on change of circumstances, nor modulate any clause to such an extent that de facto the theory would not be applicable. The theory allows for a renegotiation of the contract or a revision by the court on the basis of a serious contractual imbalance between the contracting parties due to a change of circumstances, not foreseen at the time of conclusion of the agreement, making the continued performance of the contract exceptionally detrimental to one contracting party. This theory has in the past been rejected by the Belgian civil courts if not foreseen in the contract, yet it was finally codified in Article 5.74 of the Civil Code of 28 April 2022. The application of the theory of change of circumstances can however still be precluded by law or by the contracting parties themselves. The new provision came into force on 1 January 2023 and therefore only applies to contracts concluded from that date.
Although aforementioned commitment of the parties to the Agro Food Chain constitutes a restriction of contractual freedom, the BCA ruled that the commitment does not in itself seem to constitute an infringement on competition law. The BCA nevertheless stressed that this is merely an informal view that can depend on the factual circumstances. At the same time, the BCA stressed that the parties should be careful not to implement the commitment in a way that could violate competition law, which would be the case, for example, if competitors decided to jointly increase their prices following a change of circumstances.
This is not the first time the BCA expressed an informal opinion in the agricultural industry. In 2015, the BCA has also given two informal (favourable) opinions on two crisis measures (agreements) adopted by the Chain Platform with respect to the milk and pork industry.
And more recently, on 30 March 2023, the BCA published a press release in which it has assessed a sustainability initiative on ‘living wages in the banana sector’ (between IDH Sustainable Trade and certain large retail chains). Even though the press release has not expressly been published as an “informal opinion”, it constitutes yet another illustration that the BCA is ready to informally express its view on a matter.
In general, this development illustrates the increased activity of the BCA and willingness to assist businesses through informal channels.
This article was published in the Competition Newsletter of April 2023. Other articles in this newsletter: