The Federation of German Food and Drink Industries, BVE, has described the Unfair Trade Practices Bill as a 'step in the right direction'.
Amendment to the Agricultural Market Structure Act will allow the implementation of the EU directive against unfair trading practices in the food supply chain.
The proposed law goes beyond a 'one-to-one' implementation and provides an expanded scope and stricter rules, the BVE added.
Unfair Trade Practices
Peter Feller, deputy managing director of BVE, commented, "This is an urgently needed step in the right direction, which others must follow. Concentration in the German food retail sector continues to progress.
"We hear more voices than ever from the companies complaining about unfair behaviour of individual trading partners, such as unjustified invoice reductions on a large scale."
In addition to measures like returning ordered goods without paying the purchase price and charging listing fees for products already on the market, the draft law provides the scope to extend the turnover limit of suppliers from €350 million to €4 billion for certain product categories, such as meat, milk, fruit and vegetables.
Feller added, "Numerous companies in the food industry are above the €350 million turnover limit and will continue to suffer from unfair trade practices in the future. This law will not help them.
"In principle, all suppliers suffer from the concentration in the food retail sector and the associated adverse effects. There is still a need for action here, which must be addressed at the latest in the foreseeable evaluation of the law."
With an annual turnover of €185 billion, the food industry is the third-largest industrial sector in Germany.
It employs more than 610,000 people in 6,100 companies that supply consumers with high-quality and affordable food.
The sector comprises small and medium-sized enterprises, with 90% of the companies in the German food industry belonging to the SME sector.
The country's food industry exports 33% of its products, which shows that customers all over the world appreciate the quality of German food.