‘Progress on EU retail regulation is only a first step’ – Healy

Irish Farmers’ Association (IFA) president Joe Healy will offer his view on the latest European Commission proposal on retail regulation when he addresses the Agriculture Committee of the European Parliament later today.

Speaking ahead of his address, Healy acknowledged that the initiative – presented by EU Commissioner for Agriculture and Rural Development Phil Hogan this morning – prioritises the imbalance in the food supply chain and recognises the vulnerability of producers in it.

‘First step’

The president said: “The introduction of a minimum common standard of protection across member states is to be welcomed – but, this is only a first step in reining in retailers and rebalancing power in the food chain.

The current situation, where processors and retailers always make a margin while farmers are sometimes forced to produce at or below the cost of production, is totally unacceptable.

The president noted that the directive provides for the designation of “a public authority” for the purpose of enforcement.

“IFA’s experience is that an independent retail regulator with a specific remit is required – similar to the UK Grocery Code Adjudicator which has proved to be a game-changer.

“In Ireland’s case, this function is being subsumed in the Competition and Consumer Protection Commission (CCPC), where its effectiveness is lost. The proposed directive holds up the UK model as best practice, and this is the model that the Irish Government must follow.”

‘No confidence in past measures’

The Irish Grocery Goods Regulations 2016 introduced measures in this country banning Unfair Trading Practices (UTPs), which are now to be outlawed at European level under the proposed directive.

Healy expanded on this, stating: “The single biggest issue for farmers is that they have no confidence in the CCPC to enforce the regulations.

The establishment by the Government of a visible and active independent retail regulator would give confidence to suppliers that their complaints would be taken seriously and pursued.

The president added: “The aim of the harmonisation approach being proposed is to tackle a shortlist of UTPs and to provide for enforcement powers to tackle the fear factor.

“In addition, it is proposed that the European Commission will establish a network of enforcement authorities. This will allow for the exchange of best enforcement practices; plus a platform to discuss and improve the application of UTP rules.”

Healy called on the European Parliament to strengthen the legislation by adding other UTPs so that producers have clear written contracts.

Other abuses by retailers that need to be tackled include unsustainable discounting / below-cost selling and payment for retention or better positioning of shelf space.

Transparency

The president pointed out that the commission’s proposals on UTPs are to be followed by new legislation on transparency in the food chain.

This must provide for mandatory price reporting at all levels in the food chain; so that margins and profitability of processors and retailers are clearly visible.

In a final point from the farmers’ organisation, he said further EU measures are also required to increase the transparency rules for processor and retailer multinationals; and to provide for the reporting of turnover, profit and taxation within each member state.