Dods EU Briefing: Tackling unfair trading practices in the business-to-business food supply chain

On September 23, the AGRI Committee heard a presentation by the Commission of its Communication on Tackling unfair trading practices in the business-to-business food supply chain.

By Dods EU monitoring

24 Sep 2014

Please note that this does not constitute a formal record of the proceedings of the meeting. It is dependent on interpretation and acts as an unofficial summary of the debate.

Due to insufficient time remaining for the discussion, the Chair indicated that whilst questions from MEPs would be taken, the Commission would be invited to answer at a later meeting.

The Commission representative was pleased to see such interest from the Committee. Farmers play a substantial role in the supply chain and can be particularly vulnerable to unfair practices. There have been debates in this Committee and others and this is a complex issue.

She noted that this Communication is addressed to all of those involved in the debate. It is only by getting everybody together that we will be able to find satisfactory solutions, she explained. She continued by speaking about the supply chain initiative, standards of good practice and enforcement at national level.

The Commission recognises the supply chain initiative and it is important that as many stakeholders as possible sign up to it. The Commission is aware that the Committee sees weaknesses in this initiative. Farmers have not found it necessary to sign up to this initiative because they think it is not adequate. The Commission tried to address this. What they need is wide acceptance of EU principles. She hoped that there will be wider understanding across the EU of the supply chain and acceptance of principles on an EU basis.

Discussions with stakeholders also showed concerns about enforcement. They need deterrence in this area. Even with the best intentions, the voluntary initiative can only go so far. The Communication asks to look at enforcement systems and mechanisms in place. The Commission pointed at two things, confidentiality for companies submitting complaints and the possibility of an independent body for enforcement. If Member States can provide insurances on this, this might bring parties on board.

What is next? For the next 15 months, the Commission will be assessing what is happening on the ground and look into details on enforcement practices in Member States. By the end of 2015, the Commission will come out with an assessment on what is happening on the ground and possibilities for further action.

Bas Belder (ECR, NL) said that primary producers are the weakest link in the supply chain. This issue goes back to 2011. They are still not moving forward. Are we going to get a directive with minimum rules applying in all Member States, he asked.

Esther Herranz García (EPP, ES) said that the proposal is all about making recommendations and is a weak proposal. The AGRI Committee is talking about regulation for the whole supply chain. She called on the Commission to resist pressure from Member States and to establish a control agency with effective tools to ensure that the sector stick to good practices. The Spanish example is a good one, she said, with tools also helping to deal with the Russian crisis.

Mairead McGuinness (EEP, IE) urged the Committee to take ownership of this issue. The Commission is not taking this seriously. It involves and affects framers and the entire supply chain integrity. How will you evaluate and how will this be enforced as it is a voluntary code, she asked the representative. She finally asked to include the responsibility of the food supply chain into the AGRI portfolio.

Paolo De Castro (S&D, IT) said that the subject of unfair practices is very important. They need to do justice to it. He wrote a letter to President Juncker about this. The Parliament needs to draft an own-initiative report. The problems are major ones and distortions of competition are important giving the issue of late payment as an example.

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