The voluntary code, published by food industry association Fevia in collaboration with other industry groups, will serve as the basis for a sustainable relationship between suppliers and purchasers.
The initiative comes in response to recent price pressures affecting the industry, as manufacturers became squeezed between higher raw material costs and a market demand for lower prices on the shelves, said Fevia.
Although competition in the market is a healthy driver, excessive price fluctuations cause tension between stakeholders in the food chain and can threaten the viability of a number of operators, said the group.
The new code of conduct hopes to harmonise the food production chain and ensure sustainable growth along three pillars: economic, ecological and social. Signatories include agricultural groups (ABS, Boerenbond, FWA) and distributors (FEDIS), as well as food producers. The organisations said the voluntary code is starting out as a national initiative, but they hope it will ultimately extend to other European countries.
As part of the recommendations, suppliers and purchasers in the food chain will agree to exchange information on market trends in order to allow suppliers to adapt and diversify their offering according to demand.
Purchasers also agree to source local products that are competitively positioned – both in terms of price and quality – and to ensure careful handling of these.
Buyers also commit to promote and respect agreed payment terms as part of a wider agreement on supply terms. In the event of disagreements, both parties agree to cooperate on mediation strategies to resolve disputes.
The Belgian initiative follows a general call from the European Commission for harmonisation in the food supply chain, which it believes must undergo fundamental reform, said Fevia.
The new common agricultural policy and the progressive reduction in agricultural price supports have shaken relations between actors in the food chain, creating tension and uncertainty.
In a communication last year, the Commission identified that food chain relations were sub-optimal, that there was a lack of transparency in prices, and competition was weakening in all sectors.
In particular, the Commission feared that the price of food at the consumption end was increasing faster than could be addressed by economic factors. Improvement in the supervision of food prices was said to be necessary, as well as a reinforcement of the position of farmers in the negotiations through the support of producer organisations.