Improving the food supply chain

Key points

• Unfair Trading Practices (UTPs) in the food supply chain originate in imbalances of power between operators across the chain and lead to negative economic, social and environmental effects. The EESC welcomes the Commission proposal to reduce the occurrence of UTPs as a necessary first step to protecting weaker operators, in particular farmers, workers and certain operators, and to improving governance in the food supply chain. A regulatory approach and a legislative framework with effective and robust enforcement mechanisms is the way UTPs can be effectively addressed at EU level.
• The EESC regrets, however, that the Commission has only introduced a minimum common standard of protection across the EU by prohibiting just a specific number of UTPs. A ban on all abusive practices is necessary.
• Regarding limitation of the protection against UTPs to only SME suppliers as regards their sales to buyers which are not SMEs, the EESC believes that this is not sufficient to effectively address the problem of imbalances of power and that this will not have any meaningful impact. Protection should be extended to all operators, large and small, within and outside the EU. Even when large operators are victims of UTPs, the economic effect is frequently passed on to the weakest actors in the chain.
• On enforcement, the EESC welcomes the Commission proposal to create an EU harmonised framework of enforcement authorities. However, the enforcement mechanisms should also be strengthened, for example with a specific ombudsman procedure, class action and law enforcement by the authorities, to protect the anonymity of the complainant. Such mechanisms should also be accompanied by the possibility of introducing sanctions. To facilitate the complaint process, written contracts should be mandatory and would bring more fairness in the negotiations.
• In addition to tackling UTPs, the EESC recommends that the Commission encourage and support business models that play a role in making the supply chain sustainable (e.g. shortening it, increasing transparency, etc.), rebalancing it and improving efficiency, in order to strengthen the balance of power.
• Last but not least, the EESC reiterates that promoting fairer trading practices should be part of a comprehensive EU food policy, ensuring that the food supply chain is more economically, socially and environmentally sustainable, with a view to implementing the UN Sustainable Development Goals.