Retailers for efficient food supply chain. Retailers need a diverse agriculture sector in Europe that can produce a reliable and sustainable supply of food of the right quality, in the right quantities and the right products that consumers want to buy.
EuroCommerce Director-General Christian Verschueren said:
“Retailers need European farmers able to compete successfully in an open market economy, and producing the diversity of food that is Europe’s unique strength. We regret that the debate on this relationship has long been fed by the misleading argument that farmers’ problems will be solved at a stroke by legislation against retailers. This is disingenuous, and diverts activity away from where policy could help farmers flourish in the future. What is more, it risks harming the interests of already hard-pressed consumers.”
Here are a few reasons why EU legislation would offer nothing to farmers except a gesture to show that the EU has responded to a call for “something to be done”:
– retailers buy very little direct from farmers: on average across Europe, food retailers buy less than 5% of their products direct from farmers. Furthermore, with many intermediaries, each taking a margin, the price paid for a processed product by a retailer will have little effect on the price those intermediaries pay the farmer.
– no added value of an EU-level legislation: 20 Member States have legislation on UTPs. Over 80% of retailers’ contracts for foods are for products supplied nationally. Even where a product is sourced cross-border, the contract will always stipulate which national jurisdiction applies. All of these national laws have provisions to protect parties against any unfair or unilateral breach of contract. This, in our view, points to the absence of any need for EU legislation. The Juncker Commission has given new impetus to both subsidiarity and better regulation in the way it approaches legislation, and this seems to us an example where both should apply.
– the Supply Chain Initiative (SCI) has encouraged dialogue and positive behaviour: the SCI cannot and does not seek to replace national legislation, but rather supplement it by applying common principles, which were agreed with and signed by farmers’ representatives four years ago, and by encouraging dispute resolution in a way that facilitates the continuation of business relationships. The SCI is currently looking at ways to strengthen its independence and other aspects of its work in response to Commission recommendations.
Christian Verschueren concluded:
“These are the reasons why we are both bemused and concerned that the task force and the Council are firing their guns at the wrong target. Farmers need to be encouraged to organise to strengthen their position in the supply chain and respond to market demand – retailers would welcome this wholeheartedly. Proposing EU-level legislation to cover deals which largely do not involve farmers is not providing them with anything useful. In line with President Juncker’s approach on legislation, this European Commission needs to get involved only where it adds value.”
Retailers call for balanced response on food supply chain.
EuroCommerce called on the Commission to take a balanced approach in responding to agriculture ministers’ recommendations on so-called unfair trading practices, and promote better organisation of the agriculture sector and positive dialogue across the supply chain.
EuroCommerce Director-General Christian Verschueren said:
“We were pleased that agriculture ministers agreed to ask for a considered and balanced approach to looking at ways of helping farmers improve their position in the supply chain. We invite the Commission to follow the Council conclusions: conduct a proper impact assessment and work towards a framework that respects subsidiarity and safeguards well-functioning national systems.”
EuroCommerce has always been clear that EU-level legislation would simply be an empty political gesture that would do nothing to help farmers, and instead simply risk creating ineffective bureaucracy and higher prices for consumers. As EuroCommerce has often pointed out, retailers on average buy less than 5% of their product range direct from farmers. An added EU layer of legislation on top of national laws already in place would have no impact on the prices farmers get for their produce.
Christian Verschueren added:
“As we have said before, we want a sustainable farming sector that is able to respond positively to changing consumer demand. We will therefore be seeking to work with the Commission and, if they are willing, farmers’ representatives, next year to focus on EU policy solutions which can best help farmers’ position in the supply chain. We hope that all involved will look at concrete ways of encouraging structural change and promoting dialogue across the supply chain.”
EuroCommerce is the principal European organisation representing the retail and wholesale sector. It embraces national associations in 31 countries and 5.4 million companies, both leading multinational retailers such as Carrefour, Ikea, Metro and Tesco and many small family operations.
Retail and wholesale provide a link between producers and 500 million European consumers over a billion times a day. It generates 1 in 7 jobs, providing a varied career for 29 million Europeans, many of them young people. It also supports millions of further jobs throughout the supply chain, from small local suppliers to international businesses. EuroCommerce is the recognised European social partner for the retail and wholesale sector.
