Confidence grows for EU action on unfair trading practises

There is a growing confidence that the European Union will move quickly to tackle unfair trading practises.

The IFA is confirming that meaningful, pan-EU, legislation that tackles the issue of delivering a realistic share of the retail cake back to farmers could become a reality in the very near future.

“The first step in the process is getting the myriad national codes of practice, already in operation, to be enacted on a consistent basis across Europe,” an IFA source said.

“Many of the current schemes are voluntary in nature.”

Moving beyond this the IFA representative said that issues such as late payments, which occur right down along the food chain, must be tackled.

The fundamental problem associated with retailers selling produce at price below the cost of production must also be tackled, from a legislative perspective.

“This will help deliver a better price to farmers. Commissioner Phil Hogan has asked the recently established Agricultural Markets Task Force to report back on this issue as a matter of priority,” the source said.

But the IFA believes it may not be possible to introduce legislation which would ensure that farmers get a minimum percentage of the retail price for the produce they bring to market.

“In theory, this would be the obvious way forward. But claims of price fixing might well scupper such a proposal from becoming reality,” the IFA spokesperson said.

Meanwhile, Copa and Cogeca has welcomed calls for EU legislation to tackle unfair trading practices in the food chain and to ensure a fair margin for producers.

Speaking in Brussels, the Chairman of Copa and Cogeca’s Food Chain Working Party Joe Healy said the very well respected UK adjudicator made it clear that statutory EU legislation is needed across the EU to combat unfair trading practices because voluntary initiatives do not work.

“The price the farmer gets often does not even cover his production costs. Below cost selling must stop.

The legislation also needs to be enforced by an independent body with the mandate to apply fines when rules are broken.

“We have heard how there has been an improvement already in the UK since legislation was enforced and fines were introduced worth up to 1% of a retailers turnover.

“One of the most common complaints has been delays in payments. Spain has also recently introduced legislation that works well and it’s a good model for the EU to build on,” he said.

Healy also said that a fair and transparent and well-functioning food supply chain is needed.

We need written contracts between producers, processors and retailers that are enforced to ensure farmers are given a fair price for their produce and are paid on time.

“Different initiatives are currently in place at national level but we need rules at EU level that can be enforced as large retailers are increasingly pan-European and regulation in one country will not prevent abuse across borders.

“We need to guarantee that the internal market is functioning properly,” he said.

The Copa and Cogeca Chair also said the Slovak Presidency’s prioritisation of this issue has been welcomed.

“The European Commission has indicated that it’s willing to consider introducing legislation and I want to see movement here,” he said.