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EU ag interests disagree on supply chain

Dec. 10, 2012 at 12:03 AM   |   Comments

BRUSSELS, Dec. 10 (UPI) -- European agribusiness interests and farmers say they can't agree on proposed EU enforcement powers to tackle food supply chain "unfair trade practices."

A high-level European Commission forum bringing together Europe's top agribusiness interests and farmers' representatives issued a report last week in which they expressed support for "around 80 percent" of a package of initiatives designed to improve the efficiency and competitiveness of the food supply chain.

Brussels says the measures are needed in an increasingly competitive global market for agricultural and food products, in which the European Union holds a 19 percent share but faces challenges from established trade partners such as the United States, Australia and New Zealand and emerging economies such as Brazil and China.

The panel couldn't, however, come to terms on how best to police instances of unfair trade practices, which European farmers say are common as the food retailing and distribution industries consolidate into larger market players.

European Commission Vice President Antonio Tajani said the lack of a deal on how to adjudicate supply-chain unfair practices was disappointing but that he remained optimistic an agreement could be accomplished.

"Stakeholders have demonstrated their commitment to improve the efficiency and competitiveness of the food supply chain," he said in a statement released with other EU agriculture officials. "We regret that no agreement has yet been reached on business-to-business unfair trading practices but believe that this can still be done."

The high-level forum said in its report there was a lack of consensus on whether enforcement for unfair trade practices should be voluntary under a self-enforced code or mandatory under legislation.

Agribusiness interests such as the European Chamber of Commerce, FoodDrinkEurope and the Union of Groups of Independent Retailers of Europe proposed a voluntary framework to implement and enforce a proposed set of good practice principles.

Farmers' groups and meat processors want a legislative solution -- a position Tajani and EU Agriculture Commissioner Dacian Ciolos indicated last week would be considered if a voluntary system can't be agreed upon.

Gwilym Jones, member of Ciolos' Cabinet, told the Westminster Food and Nutrition Forum Thursday in London the European Commission believes some kind of regulatory system is needed to police the food supply chain, the British online trade journal Foodmanufacture.co.uk reported.

"We must get rid of abusive commercial practices," he said. "... But it needs some form of enforcement framework that participants can agree on."

His appearance in London coincided with a decision by the British government to grant regulatory "teeth" to new office of Groceries Code Adjudicator, which will have the power to fine large retailers found to dealing unfairly with farmers and suppliers.

The code applies to the 10 British retailers with market shares in excess of $1.6 billion.

Among other provisions, it limits their power to force suppliers to change their supply chain procedures and to make them pay marketing costs and compensation for waste.

"We expect fines to be used as a last resort but the fact that the adjudicator has the power to impose them will send a strong message to retailers that compliance with the code is not optional," British Competition Minister Jo Swinson said.

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