A well-functioning and efficient food supply chain

The European Commission wants to eliminate or reduce unfair practices applied by large retailers and food suppliers against their weaker trading parties.

ACT

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Tackling unfair trading practices in the business-to-business food supply chain (COM(2014) 472 final of 15.7.2014).

SUMMARY

WHAT DOES THE COMMUNICATION DO?

The communication emphasises the importance of small businesses in the European Union’s food supply chain*. It does not propose legislation to ensure a level playing field between smaller suppliers and retailers on the one hand and large multinational manufacturers and supermarkets on the other; instead, it suggests a combination of voluntary initiatives and national enforcement measures to prevent unfair trading practices.

KEY POINTS

The communication suggests three areas of action, as described below.

• 1.

  Support for the voluntary supply chain initiative. Launched in September 2013, it promotes voluntary codes of conduct to ensure fair and sustainable commercial relationships.

• 2.

  Use of EU-wide good practice principles. A set of principles of good practice has been agreed by all stakeholders in the EU food supply chain. These principles could be the basis for a common understanding of what constitutes fair and sustainable business practices.

• 3.

  Ensure effective national enforcement. Minimum enforcement standards throughout the EU would be a credible deterrent against applying unfair practices and help to address the ‘fear factor’ of the weaker party in a trading relationship.

BACKGROUND

Some 47 million people, many in small businesses, work in the food supply chain, which represents a market of €1.05 trillion. The communication follows on from the European retail action plan and a Commission Green Paper - both published in January 2013 - which highlighted the harmful effects of unfair trading practices, especially for small businesses.

KEY TERM

A food supply chain is the process by which food from a farm ends up on our tables. It comprises the production, processing, distribution, consumption and disposal phases.

RELATED ACTS

Green Paper on unfair trading practices in the business-to-business food and non-food supply chain in Europe (COM(2013) 37 final of 31 January 2013).

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Setting up a European retail action plan (COM(2013) 36 final of 31.1.2013)

last update 08.12.2014