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  • Author: Jan Werner

Introduction - Position: Better Functioning of the Food Supply Chain

"Non paper" presented by Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Slovakia and Slovenia

handshaking - good contract

This article includes several parts:

Following METROs approach for a transparent and responsible lobbying of our interests and clearly stating our arguments and positions in a public debate, we wish to explain our arguments to some of the proposals mentioned by the ministers of Agriculture of seven EU- member states Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Slovakia and Slovenia. We invite you to a dialogue and look forward to your comments.

Introduction

Monday, 19th of June 2017 the EU Parliament’s AGRI Committee had invited the Agricultural Ministers of Slovakia, Slovenia and the Czech Republic to an exchange on the "non paper" on "Better functioning of the food supply chain: addressing unfair trading practices and improving the position of farmers" which was presented by the seven EU-member states on March 6, 2017 in the Agriculture and Fisheries Council already.

Excursion

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 The discussion on alleged unfair trading practices (UTP) in the food supply chain – and there especially in relation to farmers and the call for EU legislation is on the agenda since several years now in Brussels.

In 2010 the EU Commission launched the High Level Forum for a Better Functioning Food Supply Chain which recommended at the end of 2011 the set-up of a voluntary mediation scheme among actors in the food supply chain. Subsequently in 2013 the Supply Chain Initiative (SCI) was launched by 7 EU level associations with the aim to increase fairness in commercial relations along the food supply chain.

A study published on behalf of the European Commission in 2016 examined the developments in the Member States concerning alleged unfair trade practices, as well as the experiences of participants and non-participants of the Supply Chain Initiative. The study concluded that there is currently no need to regulate unfair trade practices at EU level. But it encouraged especially the farming sector to support the initiative and criticised that the EU-level reference organisation COPA-COGECA does not support the initiative.

In contrast, the report of the European Parliament on UTP from June 2016 partially blames the trade industry for the current problems faced by farmers, calls for Europe-wide regulations and is highly critical of own brands, among other things.  

The Agricultural Markets Task Force – installed by the Commission in the course of recent negative prize developments in the milk markets of the European Union in 2016 – published its recommendation in November 2016 and concluded that among other measures in the agricultural sector also the policy framework governing the supply chain "can and should be further improved."
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METRO supports the agricultural sector

Despite the fact that retailers in general have less than 5 % direct contracts with farmers as suppliers in the food supply chain, METRO wishes to make clear that we want and need a vibrant agriculture sector in Europe that can produce a reliable and competitive supply of food. We support many of the recommendations of the Agricultural Task Force report, for instance on encouragement of producers cooperating more closely to improve their bargaining power, use of risk management tools, access to finance and contractualisation and we invite again COPA-COGECA and other national farmer associations to join the Supply Chain Initiative (SCI) as many of the principles for good contracts mentioned in this “Non paper” are part of the agreed framework of the members in the SCI.


In some of our countries METRO is engaged in projects with farmers and co-operatives to improve quality in the food supply chain and to help small and medium sized businesses in the sector for a better market position. (You will shortly find the projects on our website)


But however, we have to reiterate again our clear conviction that EU-level legislation on trading practices will distort the supply chain, harm consumers and do nothing to help farmers.

Jan Werner

Information about the author

Jan Werner works as Head of Legal International at METRO AG jan.werner@metro.de

This article includes several parts: