EU plans new laws to tackle unfair trading practices

The EU Commission is working on proposals for new laws to protect farmers from unfair trading practices in the food chain and to improve market transparency.

Farm commissioner Phil Hogan has told MEPs on the committee on agriculture and rural development that he intends to bring forward proposals to improve the way food supply chain functions.

Mr Hogan told the meeting in Strasbourg on 15 May they key issue was “to ensure fairness for producers in the food chain… to safeguard the viability and survival of our primary producers, without which we will not have an agricultural sector”.

See also: EU considers six rules to protect farmers from unfair trading

The commissioner said he would reveal further details at the committee’s meeting on 20 June, where he would be joined by competition commissioner Margrethe Vestager.

It is understood the commission may be looking at an approach along the lines of the recommendations made in the report of the Agricultural Markets Taskforce in November 2016.

This report included a call for framework legislation to be introduced at an EU level to cover certain baseline unfair trading practices – such as the maximum payment period.

Mr Hogan’s comments come just weeks after the chairman of Copa-Cogeca’s food chain working party, Joe Healy, warned that unfair trading practices by retailers cost farmers and agri co-ops across Europe nearly €11bn/year (£9.4bn/year).

An independent report commissioned by Copa found 94% of farmers and 95% of agri co-ops have been exposed at least once to examples of unfair practices, including late payments, below-cost selling, pay-to-play demands and payments being requested for shelf space.

UK implications

Christine McDowell, food chain adviser for the NFU, said the European Commission has shown a clear interest in the work of the UK’s Grocery Code Adjudicator (GCA), introduced in 2013, and it might seek to implement something similar across the EU.

However, while the NFU is very supportive of the work of the GCA it continues to push for its powers to be extended so more producers are covered by the Groceries Supply Code of Practice.

The NFU is seeking for government to extend the code to cover more food retailers and processors and for farmers to have the right to appeal to the GCA anonymously.

It also wants ornamental growers to be offered protection, as they are excluded, and for voluntary codes of practice – such as those in place in the dairy and beef sectors – to be enshrined in legislation.

“Post Brexit we will have to be competitive on the global food chain which [is] all the more reason why we need the food chain working fairly,” she said.