Imbalance in power between producers and retailers unfair, says McGuinness

The new EU Commission must urgently tackle unfair trading practices in the food supply chain, Mairead McGuinness MEP and Vice-President of the European Parliament has said.

Speaking in advance of the publication this week of an EU Commission report on unfair trading practices in the food supply chain she called for the new Commission to “hit the ground running on this one and not accept that the current pace of progress is sufficient.”

The MEP said the imbalance in power between producers and retailers and other layers of the food supply chain results in unfair and unethical practices “whereby the powerful impose conditions on the powerless in an unfair manner, leading to reduced margins, impossible specifications demands and poor returns for investment outlay.”

She said various member states have taken initiatives and there is now a voluntary supply chain initiative at EU level that came very late in the day in an attempt to address the issue.

“Farmers have remained outside the voluntary initiative believing it to be a weak and ineffective tool to monitor and police unfair practices.

“I firmly believe the Commission is placing too much emphasis on the voluntary initiative and now looks set to delay any further action until 2016,” she said.

Referring specifically to the crisis in the Irish beef sector where meat plants had moved unilaterally to change carcass specifications and made other demands, which resulted in reductions in price to beef farmers, McGuinness said: “This type of moving of the goal posts in the middle of the game is at the very least unfair and borders on the unethical. Just because the factories are powerful, they can impose these new rules overnight, with farmers powerless to do anything except take what they are offered.

“This amounts to unfair trading practice and works against the EU goal of achieving a sustainable food supply chain. There are very real fears that because of the deep distrust between farmers and factories many will exit beef production to the detriment of the economy.”

McGuinness said there are many stakeholders in the food supply chain who do not want any action at EU level other than the “soft” approach of a voluntary code of conduct.

“However, voluntary codes cannot be relied upon to deliver a sustainable EU food supply chain. Further work is required at EU level and this must be a priority of the incoming Commission.

“However, I am deeply concerned that all the indications seem to point to little real action being taken before 2016 to address many of the serious problems in the food chain.

“I am calling on the new Commission to hit the ground running on this one and not accept that the current pace of progress is sufficient.

“Otherwise, it may be too late for many producers. For the powerful it would be an opportunity to concentrate further their power to the disadvantage of producers and SMEs,” McGuinness said.

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