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07/12/2016

EU moves to protect farmers from aggressive supermarket buying tactics

Agriculture & Food

EU moves to protect farmers from aggressive supermarket buying tactics

Carrefour has been accused of forcing farmers to sell their produce at very low prices.

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As France launches an investigation into Carrefour’s unfair business practices, a new Brussels report has called for the relationship between farmers and supermarkets to be rebalanced. EurActiv France reports.

Ironically, one of the members of the European Commission’s Agricultural Markets Task Force, the group behind this report on enhancing the position of farmers in the supply chain, is the deputy CEO and General Secretary of Carrefour, Jérôme Bédier.

The supermarket chain received a slap on the wrist from the French economy ministry on 9 November. In a court summons, Carrefour was accused of using unfair practices in its negotiations with suppliers, in order to bring down its sale prices.

And this apparent conflict of interests did not go unnoticed. “This is a bit rich when we know that the Carrefour group is being prosecuted by the French state for abusive commercial practices,” said Éric Andrieu, a French Socialist MEP (S&D) and vice-president of the European Parliament’s Agriculture Committee.

Despite his participation in the report, the Carrefour representative distanced himself from the expert panel’s conclusions.

“It is a shame […] that the representative of the distribution sector in the task force has distanced himself from the conclusions. This sector had an opportunity to participate in a constructive way in the fight against unfair practices, which are and must remain the exception to the rule,” said Michel Dantin, a French Republican lawmaker (EPP).

Supermarkets and abusive commercial practices

The 12-member task force released its report on Monday (14 November), in which it called on the Commission to pass legislation to support European farmers in their negotiations with the distribution sector.

“Our mission is to improve the position of farmers in the food chain,” said Cees Veerman, the task force chair.

“There are enormous imbalances in the negotiating power of the different parties in the supply chain, which can lead to unfair business practices and are a constant source of uncertainty for farmers,” he added.

Tough competition

Big distributors are often accused of unfairly using their economic clout to buy from farmers at reduced prices. The list of techniques is long and varied, and includes making retroactive changes to contracts or simply revoking agreements.

“The big distributors have unquestionably been on the side of the consumer in recent years, as they have brought down the price of a shopping basket,” said Dantin. But this change has been devastating for farmers’ income.

To fight this imbalance effectively, the report calls for the establishment of a European regulatory framework that would blacklist all unfair commercial practices.

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The experts also recommended that independent authorities be put in place to oversee the implementation of this framework.

For the task force, the various voluntary initiatives that have been put in place to rebalance the relationship between farmers and distributors “have not solved the problem”.

“We therefore recommend a legislative framework at the European level,” said Veerman.

Proposal in 2017?

“We will now prioritise our consideration of the report and its recommendations with a view to delivering the appropriate policy response,” said Agriculture Commissioner Phil Hogan.

“In view of recent difficulties in some specific sectors, we identified the need to strengthen the role of the farmer in the food chain with the objective of ensuring that he/she gets a fair return for their produce,” he added.

“These conclusions are likely to force the European Commission to act and produce rules on the supply chain,” said Dantin. “We expect a legislative proposal from the Commission in 2017,” the MEP added.

Further Reading

Agricultural Markets Task Force