National authorities should ensure that EU competition rules on unfair commercial practices are enforced, argues the EU executive's communication on food prices, adopted on 10 December.
Practices distorting competition include price-fixing by producers and restrictions of buyers' ability to determine the sale price for consumers.
To boost consumer protection, the communication calls for closer scrutiny of misleading price advertising to allow consumers to compare prices easily.
The Commission notes that while agricultural commodity prices have decreased sharply in recent months, "the structural causes of the price hike, like the growth in global food demand and the decline in food crop productivity growth, remain in place".
Thus the EU executive also suggests reviewing national and EU-level regulations that hinder the proper functioning of the food supply chain. Such regulations restrict the entry of new companies into the market and prevent business from fully competing. Regulations distorting the relationship between suppliers and retailers should also be reviewed.
In order to avoid excessive speculation and discourage volatility in commodity markets, the Commission promises to consider, together with commodity market regulators, ways to make markets more stable.
Finally, permanent European monitoring of food prices and the supply chain will inform consumers, public authorities and market operators on the evolution of the market.
The aim of the 'roadmap towards cheaper food' is not only to give consumers more competitive and undistorted prices, but also to protect the purchasing power of the most vulnerable citizens and support job creation, said Economic Affairs Commissioner Joaquin Almunia.
European retailers welcomed the communication, describing it as a "broadly balanced report" on the complex factors influencing food prices. They hailed "the emphasis on the competitiveness of the food supply chain" and "the long-overdue focus on reviewing member states' policies that restrict competition".
"More needs to be done to remedy the regulatory fragmentation of the EU market" to allow retailers to grasp all the benefits of the single market and get consumers a better deal, said the director of the European roundtable on retail, Paul Skehan.
EuroCommerce, which represents the European retail, wholesale and international trade sectors, also welcomed the report, but stated that "commerce wholly rejects any implication that responsibility for recent price increases should lie at its door or that it is failing to pass price decreases on to consumers".
"The price transmission issue is highly complex and largely depends on the degree of competition throughout the supply chain," said EuroCommerce Secretary-General Xavier Durieu.
