What is the role of the Food Supply Chain Relationships Ombudsman?
The Food Supply Chain Relationships Ombudsman (hereinafter: the Ombudsman) monitors actions by stakeholders in the food supply chain, publishes examples of good business practice on its website, and informs the public thereof in accordance with the regulations governing the protection of personal data and the protection of business secrets (the Agriculture Act, paragraph (1) of Article 61.d).
The Ombudsman notifies the Slovenian Competition Protection Agency of any illicit practices in the food supply chain (the Agriculture Act, paragraph (2) of Article 61.d).
Who are the stakeholders in the food supply chain?
The stakeholders in the food supply chain are the following:
- primary producers (agricultural holdings and farms);
- food processing companies and complementary activities on farms;
- small-trade businesses dealing in food products;
- supermarket chains;
The food supply chain includes production, processing, distribution, and wholesale and retail sale to final consumers; it is geared towards sustainability as its existence and development affect the economy, health, and the environment (the Agriculture Act, Article 61.č).
Where and how do the stakeholders interact with the Ombudsman?
The stakeholders interact with the Ombudsman in various ways:
- through direct dialogue at the registered office of the Ombudsman:
Ministry of Agriculture, Forestry and Food,
Dunajska 22, 1000 Ljubljana,
- email: firstname.lastname@example.org
- by post to the following address:
Ministry of Agriculture, Forestry and Food,
Dunajska 22, 1000 Ljubljana, with the note "for the Food Supply Chain Relationships Ombudsman";
through direct dialogue at the registered office of a stakeholder in the food supply chain;
- whenever and wherever possible, as agreed with the Ombudsman.
Invitation to interact with the Ombudsman
The Food Supply Chain Relationships Ombudsman calls on all stakeholders in the food supply chain to inform it of the positive and negative practices in the food supply chain identified while working with partners.
About the Ombudsman
The initiator of the function and the first Ombudsman, dr. Jože Podgoršek was appointed Secretary of State, so he terminated the function of the Ombudsman. New appointed ombudsman is Mr. Igor Hrovatič, experienced in the field of agricultural, food production, rural development, and food supply chain.
The founder of the office of the Food Supply Chain Relationships Ombudsman
The Food Supply Chain Relationships Ombudsman was appointed by the Government of the Republic of Slovenia on the proposal of the Minister of Agriculture, Forestry and Food, Dejan Židan, and the Minister of Economic Development and Technology, Zdravko Počivalšek, for a five-year term, starting on 1 March 2015.
Organisational overview, organisational chart
The office of the Food Supply Chain Relationships Ombudsman operates independently and currently has no operational support staff.
The office of the Food Supply Chain Relationships Ombudsman will strive to pursue its basic vision of maintaining a sustainable food chain. In this context, it will encourage all partners to develop good partner relations in their mutual business activities. Understanding that all stakeholders in the food supply chain are needed will help ensure that every stakeholder maintains concern for the previous and/or next link in the food chain, focusing, in particular, on ensuring economic stability and development. In this process we must raise awareness among all stakeholders in the food supply chain – from farmers, co-operatives, the food processing industry, wholesalers and retailers, to consumers – that if we are to ensure food security, we need a vital and evolving food supply chain where none of the links should fail or can be replaced.
Hence, we will pursue the objective of fair relationships between the stakeholders in the food value chain and the food supply chain. In promoting fair relationships, we will, first and foremost, advocate compliance with legislative provisions, including a ban on mandatory rebates on the invoices of suppliers and the observance of payment deadlines. Furthermore, we will encourage all actors involved in the food chain to respect Slovenian particularities compared to the countries with developed agriculture. In this sense, we should recognize the crop/product value as regards Slovenian producers and the food processing industry. And, above all, we cannot allow ourselves to think of pursuing our own profits at the expense of financially destroying our partners. As an example of non-compliance with legislation, we would like to underline the culture of late payments, which often illegally extends payment deadlines for the goods supplied.
In promoting fair relationships, we will defend moral principles in drawing up contracts between purchasers and sellers and the principles of fair profit margins in the value chain. As regards the principle of fair profit margins, we will calculate and estimate, together with agrarian economists, the fair profit margin for each stakeholder in the value chain so that it will enable the stakeholders to cover all costs and also extended reproduction.
We will encourage, in accordance with the Agriculture Act and the Trade Act, such marketing channels and practices that benefit all stakeholders and, ultimately, food purchasers. By establishing fair relationships between the stakeholders, we expect lower retail food prices for end users and fair prices for food producers and processors. In the European area, it is necessary to find good practice examples of different marketing channels and approaches and to introduce them to the Slovenian market. To this end, we will examine legislative frameworks and propose possible amendments allowing for a different manner of food marketing.
One of the important aspects of our work is regular monitoring of unfair practices. To that purpose, we will be in constant contact with individual stakeholders. If we identify any new examples of unfair practices among partners in the food supply chain, we will promptly report them to the competent institutions that are responsible for acting against such practices.
Our main objectives are the following:
- monitoring actions by stakeholders in the food supply chain;
- raising awareness among food purchasers in the value chain with regard to the legislative provisions and moral
principles that apply to the purchase of food;
- raising awareness among producers and processors as intermediaries in the food chain with regard to the
legislative frameworks for the sale and purchase of food and the rights of food sellers in the value chain; - establishing a mechanism for identifying and clamping down on the late payment culture;
- establishing a mechanism for monitoring market activities, particularly contracts and unfair practices
in the food value chain;
- promoting examples of good practice in the food value chain;
- calling the attention of the competent institutions to irregularities.
In order to achieve these objectives we will organize, with technical support from the staff of the Ministry of Agriculture, Forestry and Food, various events, such as the following:
- a discussion on the topic "Fair relationships in the food supply chain";
- meetings with the largest food purchasers on the topic "How to prevent inappropriate actions by
stakeholders in the food value chain";
- meetings with the largest food producers and processors on the topic "My statutory rights in contractual
relations with trading partners";
- a presentation of the Ombudsman's work at one or more trade fairs;
- consultation with agrarian economists and further work on the topic "Developing fair relations in the
food value chain";
- individual meetings with stakeholders with regard to identified contractual irregularities and
non-compliance with legislation.
Actual and virtual examples of stakeholders' interaction
in the food supply chain:
Examples of food supply chains:
producer – retailer – consumer (e.g. fresh fruit and vegetables, potatoes)
producer – co-operative – retailer – consumer (e.g. fresh fruit and vegetables, potatoes)
producer – food processing industry – retailer – consumer (e.g. meat and meat products)
producer – co-operative – food processing industry – retailer – consumer (e.g. milk and dairy products)
Examples of good and bad practice
Examples of good practice:
- LUŠT – TUŠ: during the launch of the production of tomatoes by the company LUŠT, the supermarket chain
Tuš invested in the promotion thereof and was initially the exclusive seller of these tomatoes, which resulted
in the successful growth of both partners;
- Spoštujemo, kar je naše, slovensko (Respect what is ours, Slovenian products): the supermarket chain
Tuš actively promotes Slovenian agricultural holdings and food processing companies and their produce/products;
- 100% SLOVENSKO (100% SLOVENIAN): the supermarket chain MERCATOR actively promotes Slovenian
agricultural holdings and food processing companies and their produce/products;
- Iz domačih krajev ("local produce" or "locally grown"): the supermarket chain MERCATOR actively promotes
Slovenian fruit and vegetables;
- Slovenija, moja dežela (Slovenia, my country): the supermarket chain SPAR actively promotes Slovenian
agricultural holdings and food processing companies and their produce/products.
Examples of bad business practices:
- the culture of late payment throughout the food chain;
- non-compliance with the net-net price by certain trading systems;
- changing price lists (lowering prices) retroactively;
- exerting great pressure by a considerably stronger party on suppliers with a view to obtaining additional
rebates or lowering purchase prices;
- tying at non-competitive prices;
- disproportionate sanctions in the event of a delay in the delivery of products or a failure to deliver products
for justifiable reasons.