Towards a Fair Food Supply Chain

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EESC opinion: Towards a Fair Food Supply Chain

Key points

  • The EESC welcomes the EU Directive on unfair trading practices (UTPs) in the agricultural and food supply chain as a step forward in addressing imbalances of power along the chain. UTPs are a complex phenomenon with wide societal implications, and regulation plays a key role in this context. The Committee urges Member States to transpose and implement the Directive and address UTPs as soon as possible.
  • The European food supply chain proved to be remarkably resilient during the COVID-19 outbreak. Consumers had access at all times to almost all food items. Despite being exposed to the risks of infection, workers across the food supply chain did a tremendous job.
  • However, early observations show that there are also notable behavioural changes in production, distribution and consumption. The EESC advocates supporting the transformation of Europe's food systems so that they are more environmentally, economically and socially sustainable, resilient, fair and inclusive and, above all, provide European consumers with healthy, sustainably produced and safe food. The EESC notes that cooperation (rather than competition) among food chain operators is essential to foster a more resilient and sustainable food system in order to ensure a fair share for the operators.
  • The EESC stresses its recommendation that weaker operators, especially farmers, be paid a fair and just price that allows suppliers to receive an income that is adequate for investment, innovation and sustainable production. A mechanism should be set up to follow up on the monitoring of the distribution of the gross value-added in the food supply chain.
  • The EESC also stresses its recommendation to tackle UTPs that are not considered within the minimum requirements of the Directive[2] and welcomes the efforts undertaken by several Member States to address issues such as buying below production cost, double race auctions, or protecting all actors in the supply chain regardless of their size or their position in the food chain. The EESC welcomes that the Commission decided to regulate unfair trading practices in the food supply chain. However, the EESC regrets that the Commission did not foster a harmonised approach to avoid fragmentation in the single market. The EESC considers that future additional measures should be compatible with the single market and subject to a proper impact assessment. Nevertheless, the EESC welcomes that the Member States are transposing and implementing the Directive, ensuring more fairness in the food supply chain, and calls for a more harmonised approach in the future.
  • The EESC calls on Member States to put in place laws that protect all business actors. Size is not necessarily a proxy of market power and, consequently, all business operators, large and small, should be protected against UTPs.
  • The EESC also encourages Member States to establish mechanisms allowing them to monitor, evaluate and enforce the implementation of the transposition laws and create forums for dialogue in cooperation with stakeholders.
  • Currently, the imbalances of economic and bargaining power in European (but also global) food systems put pressure on the profitability of the agricultural sector and the wages, the decreasing investment potential of small and medium-sized food enterprises and the abandonment of local family retail. Therefore, evidence-based corrective mechanisms are needed to ensure a balanced development of actors in the European food supply chain and to support a fair share in the economic benefits of food production and distribution inside and outside the EU, thus fostering sustainable food systems.
  • The EESC highlights the importance of all stakeholders having the right tools and information to benefit from the Directive. The EESC consequently calls on the European Commission, the Member States and the European External Action Service (EEAS) to ensure that stakeholders know their rights and the procedures to implement them, including when it comes to transnational trade, both within the EU and from third countries.
  • The EESC reiterates that promoting fairer trading practices should be part of a comprehensive EU food and trade policy, encompassing the whole supply chain and ensuring the implementation of the UN Sustainable Development Goals (SDGs).