MEPs back resolution on unfair trading practices in food chains

The European Parliament (EP) adopted a resolution on Tuesday calling on the European Commission to put forward proposals against so-called unfair trading practices (UTPs) in the food supply chain.

MEPs stressed that selling below the cost of production, and the "serious misuse" of basic agricultural foods such as dairy, fruit and vegetables as loss leaders by large-scale retailers, threaten the long-term sustainability of EU production.

European farmers say their livelihoods are at crisis point following several years of low prices, with many farms weighed down with large debts.

Farmers and small businesses are particularly vulnerable to UTPs, the EP heard during the debate. They are sometimes forced to sell at a loss when price negotiations with a stronger party put them at a disadvantage, for example, by making them bear the cost of supermarket discounts.

Other examples of UTPs cited were delaying payments to suppliers, unilateral or retroactive changes to contract terms, and sudden, unjustified cancellation of contracts.

The rapporteur, Polish Conservative MEP Edward Czesak, said this was compounded by a so-called "fear factor" among small suppliers who do not want to take action against big retail chains for fear that the latter will refuse to deal with them completely.

"Voluntary initiatives taken so far have not been effective," Czesak said. "More work should be done to improve relations between suppliers and supermarkets and hypermarkets, especially when it comes to minimizing the fear factor."

"We call on the Commission to do more when it comes to new tools that should help us to counteract UTPs," Czesak continued "All players in the food supply chain should enjoy the same rights."

However, further moves by the Commission are likely to counter fierce resistance from food retailers.

The day before Tuesday's vote, EuroCommerce, a retail industry industry lobby group, said legislation was not the answer to the current crisis in farming.

"Legislation has not helped farmers at national level, nor can EU legislation do so either," said the group's director-general Christian Verschueren.

"The fact is that the crisis is the result of structural market issues, with a growing level of production globally, and declining consumption both in Europe and lower sales to some key export markets," Verschueren added. "This has inevitably led to lower prices." Enditem