The EC released a report into the current fight against unfair trading practices (UTPs) last Friday, where it noted significant legislative activity among member states against UTPs, and progress with the voluntary supply chain initiative (SCI). But while it identified some issues, particularly with the SCI, it said it was not planning to introduce additional regulation.
No value in more regulation
“Given the positive developments in parts of the food chain and since different approaches could address UTPs effectively, the Commission does not see the added value of a specific harmonised regulatory approach at EU level at this stage,” said the report, adding that the Commission did plan to monitor the effectiveness of recently-introduced legislation.
“As regards voluntary initiatives, the Commission concludes that the SCI has already accomplished some achievements but there is still room for improvement. In order to increase the initiative's credibility and effectiveness in tackling UTPs, the Commission proposes a discussion with the relevant stakeholders on how to improve the SCI under the High Level Forum for a Better Functioning Food Supply Chain,” the report added.
Farmers’ associations across Europe reacted with varying degrees of dismay to the report, with many upset at the Commission's lack of action. The Irish Farmers Association expressed “huge disappointment with the direction of the report” and said it didn’t tackle unfair supply chain practices.
SCI not working
“The report is clearly at odds with the strongly-held views of the Agriculture Commissioner Phil Hogan’s in relation to fairness in the food chain and his call for EU legislation,” said IFA chairman Jer Bergin.
“The voluntary Supply Chain Initiative… undertaken by the Commission is clearly not working for primary producers. If this continues unchecked, retail power and big business will destroy the Irish and European family farm structure and undermine food security for the EU’s 500 million consumers. Strong legislation is needed at European level to address this issue,” he added.
Digby Scott of the UK’s National Pig Association said: “This conclusion will disappoint the many MEPs and farm lobby groups that have called on Brussels to somehow find a way to give farmers more clout in their dealing with retailers, citing abusive practices such as late payments, unilateral changes to contracts and shifting of risk to suppliers.”
European farming group Copa-Cogeca was less condemnatory, saying it regretted the Commission’s refusal to propose new legislation, but welcoming recognition for the SCI.
“In this report, the Commission recognises the weaknesses of the SCI and calls for them to be dealt with. This is welcome news. We also welcome the Commission’s indication that the SCI should grant investigatory and sanctioning powers to an independent body. This is what Copa and Cogeca have been calling for,” said Copa-Cogeca secretary-general Pekka Pesonen.
“The fact that 20 member states have or are about to introduce national legislation in this area demonstrates to us that the problem of UTPs is an EU wide problem that needs an EU wide solution. We believe ultimately that legislation is needed to provide a level playing field to minimise EU market fragmentation and distortions of competition – a major concern for farmers and agri-cooperatives,” he added.