EU unveils plan to protect farmers from big buyers

[BRUSSELS] The European Commission unveiled Thursday proposals to help farmers and other food suppliers strike better deals with powerful retailers, enforceable with penalties to stop "unfair trading practices".

The Commission, the 28-nation EU executive, seeks to level a playing field in which it says farmers and other food suppliers often lack bargaining power with supermarkets and other means to reach consumers.

"Today's initiative to ban unfair trading practices is about strengthening the position of producers and SMEs in the food supply chain," Agriculture Commissioner Phil Hogan said.

It aims to ban practices where farms and SMEs (small and medium-sized enterprises) get late payments for perishable products and see orders cancelled at the last minute.

The new measures also aim to stop retailers from making unilateral and retroactive changes to contracts or from forcing suppliers to pay for wasted products.

Parties will be required to reach a clear upfront agreement in cases where the buyer returns unsold food to a supplier or if the supplier pays to market goods sold by the buyer.

"This is all about fairness," Hogan told AFP, adding farmers have seen their profit margins decline in the last five, even 20 years in dealing with retailers.

"If there is unfairness in the direction of the farmers then we have to intervene," the Irishman said in an interview Wednesday.

He said 20 of the 28 member states have been taking action to stop unfair trade practices but the commission needed to coordinate efforts across the whole bloc.

He said the proposals are based on the Groceries Code Adjudicator (GCA), an independent regulator in Britain designed to ensure supermarkets treat suppliers fairly.

The Commission proposed member states designate a public authority to enforce the new rules with "a proportionate and dissuasive sanction" in the event of a breach.

The commission said the new measures will not increase consumer prices.

EuroCommerce, which represents European supermarkets and retailers like Auchan, Carrefour, Lidl, Coop, Spar and Kingfisher, said the proposals will not create a level playing field.

"The Commission has not produced any evidence of a structural problem or of the utility of EU legislation in resolving it," EuroCommerce head Christian Verschueren said in a statement.

AFP