Statement of Agri Plus on the end of proceedings of the President of the Office of Competition and Consumer Protection (PL: UOKiK)
Agri Plus welcomes the Decision of the President of UOKiK, which is a result of a few years’ proceedings. The Decision confirms that the model of contract finishing applied by the company has not been questioned, since it was recognized that it contibutes to stabilization of pig production and ensuring cost-effectiveness for the growers. Agri Plus maintains that by its operations, the company has a positive impact on the development of swine production in Poland, bringing the benefits for all participants of the market. Irrespective of the proceedings, the company decided to increase the payments in contract finishing, taking into account the market situation and inflation.
After thorough analyses of the contractual relations under the contract finishing, the President of UOKiK ended the proceedings against Agri Plus Sp. Z o.o. The company welcomes the binding decision, which constittues a result of the compromise developed under a constructive dialogue. It is worth emphasizing that the reservations of the President of UOKiK had been limited only to a narrow scope of issues related to the need of constructing and specifying of the complaints included in the contracts with the contracting parties, with relation to the defects in delivered animals and feed, to which approproate solutions were agreed on and started to be implemented.
Key information about the proceedings:
- Lack of found breaches: The President of UOKiK did not find breaches in statutory regulations by Agri Plus, and thus did not impose any financial penalty on the company.
- Approval of the President of UOKiK of the changes proposed by Agri Plus: President of UOKiK considered justified to end the proceedings concentrated on verification of contracts related to the contract finishing by approving the proposed obligations presented by Agri Plus. Modifications proposed by the company – i.e. introduction of additional provisions to the contract, were considered satisfying and remove the doubts raised in the course of proceedings.
- Scope of modifications in contracts:The obligations concern the aspects of cooperation with growers in the event of quality defects in animals and feed delivered by Agri Plus, which according to the President of UOKiK had not been specified enough in the wording of the contract. In view of the above, the company declared to add new provisions concerning the scope of contracting parties’ rights and complaint procedures. For the growers this will result in even greater transparency of the cooperation terms, since the rules already practiced in Agri Plus, will also be reflected in formal provisions. The company will introduce appropriate changes in new contract templates and will propose appropriate annexes to the currently valid contracts.
It is worth noticing that the proceedings of UOKiK within the mentioned scope lasted almost 4 years and during that time a number of penetrating tests and analyses were conducted. The company received the result of the conducted proceedings with satisfaction, since it confirms that the company policy and applied cooperation principles with Polish pig growers are not only right, but also provide a possibility for development and support to all entities of this sector.
Moreover, it needs to be stressed that under the above proceedings, the Institute of Agricultural and Food Economics carried out an expert opionion entitled “Calculation of profitability of pig production under the market model (on an open market) and under the contract finishing model”. The evaluation included farms located across Poland, their income, so value of production counted per 100 kg of a gross livestock, costs incurred and economic results. Opinions of the experts showed that contract finishing during the last few years was profitable for the growers unlike the open free-market finishing, which generated losses, since the established profitability indicator means revenues lower by approx. 11% than the production costs. The decision stressed that under contract finishing the growers have fixed revenues and avoid market risks, such as fluctuations in purchase prices or changes in prices of nursery pigs and feed.
Agri Plus as a company transparently operating on the Polish market for over 20 years attaches great importance to the transparency and honesty in relations with the contracting parties, based on the highest ethical values. The company cooperates only with Polish swine growers, therefore it was fully engaged in the proceedings of the President of UOKiK and ended up developing a satisfying legal solutions for all parties.
Yours faithfully,
Management Board of Agri Plus