The resolution passed by MEPs in Strasbourg also called for the rebalancing of the food supply chain -with fairer treatment for farmers at the hands of mainly retailers, but also food processors and agricultural traders, at the heart of their concerns.
Food processing outfits, which enjoy very high margins in some countries, should come under particular scrutiny over price transparency, said the report drafted by French Green member Jose Bove.
The report suggests a raft of measures to tackle what it says are “serious problems” and price imbalances that it contends prove “the food supply chain is not functioning properly”. Mandatory reporting by major players on their market share of food products, the introduction of codes of good practice, and a clampdown on unfair contracts are among the proposals designed to boost the power of the agriculture sector.
The document is a response to the recent report by the European Commission called “A better functioning food chain in Europe”. While it agrees with the EC’s analysis over such problems such as the abuse of power, unfair contracting practices, such as late payments and unilateral contract modifications, it urges the executive to be much tougher on the likes of food processors and retailers.
Price transparency
The Commission is urged to implement an annual reporting system by food processors, retailers, traders and wholesalers on their market shares for key food items and monthly sales volumes to allow for the verification of supply, demand and price trends.
The report calls on the Brussels executive to note that in some countries the food processing industry has the largest margin in the food supply chain and declares the sector should be particularly “monitored and investigated in order to guarantee price transparency”.
A pan-European multilingual system to allow for consumers to more easily compare food prices across the region is also mooted.
Competition and abuses
MEPs said codes of good commercial practice and a complaint mechanism should be put in place to counter unfair behaviour by market players. National and European authorities are urged to tackle the dominant market position of players such as processors by implementing “a more targeted application of competition rules” and take action against perceived abuses.
It said the EC should draw up a list of abusive market practices and ensure they are banned. Companies that flout these rules should be “named and shamed” and face penalties.
Contracts
Standard contracts – which could be compulsory in some sectors – may deter practices such as altering contract terms, late payments, resale at a loss and unjustified listing fees, said the European lawmakers.
The EC should also commission a report on food waste – which comprises almost a third of all food produced in most countries – and try to tackle this through awareness-raising campaigns.