Investigate retailers price hikes, says EPP-ED

By Laura Crowley

- Last updated on GMT

Related tags: Food prices

The European Parliament will today debate whether measures should
be introduced to ensure retailers do not take advantage of the
continuing rise in food prices.

The Group of the European People's Party (Christian Democrats) and European Democrats in the European Parliament (EPP-ED) have called for the debate in order to protect farmers and consumers from feeling the brunt of the rapid increase in raw materials for food and animal feed. Poor harvests in key producing countries and a fast-growing demand for biofuel production have driven up grain prices. Livestock farmers, particularly producers of pork and poultry who need the grain for feed, are being hit by the huge increases in cereal prices. Joseph Daul, EPP-ED group chairman, told that consumers and farmers are the victims of food price hikes. He referred to reports that showed the cost of wheat price increases amounted to only 10 per cent of a loaf of bread and 5 per cent of a French baguette, yet the retail price increase can be much higher. Daul said: "In order to deal with the very worrying increases in the cost of food, I call on the Commission to urgently begin an investigation into the mark-up on food prices and ensure that major retailers not abusing their dominant position in the market by charging uncompetitive prices for food." ​The rise in the cost of raw materials affects every process in the food industry, as the increased price of feed is transferred from farmers onto ingredients' producers, then onto manufacturers and retailers. Premier Foods and Sara Lee have already said that the cost of their products would go up, as has Purac, which has increased the costs of ingredients like lactic acid for the third time this year. UK supermarket Asda declared it would swallow many of the costs, as it was still committed to keeping consumer prices low. Meanwhile, Germany-based retailer Metro took Kellogg's products off its shelves earlier this month after the cereal company attempted to pass on higher commodity costs through price hikes. This will be the first time the topic is debated in the plenary session. The EPP-ED has proposed the Commission and member states analyse the discrepancies between farm gate prices and those charged by major retailers. It has also called for moves to promote the use and production of more bio fuels, as well as to address the concerns about global food insecurity. The European Commissioner for Agriculture, Fischer Boels, has predicted food prices with continue to soar, with a 30 per cent price increase in meat and meat products by 2008. The last agriculture council decided to put forward a proposal to lift the imports duties for cereals for 2008 as a means of dealing with the worsening situation in the livestock sector. Daul said: "We must act quickly to guarantee food supplies to farmers, to ensure competitive pricing at supermarkets and most of all, ensure an affordable cost to the most vulnerable consumers for which food is a big part of the household budget." ​The rise in food prices has posed problems for the European community and meant that countries are now facing the dilemma of whether they should increase retail prices, or swallow the costs themselves.

Related topics: Market Trends

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