EESC also pushing to extend protection to all operators
Unfair trading practices (UTPs) result in negative economic, social and environmental effects. The food supply chain is particularly vulnerable to UTPs, due to severe imbalances of power between small and large operators. The European Commission has recognised this problem, and the EESC appreciates the Commission's proposal for a directive on unfair trade practices in the food supply chain as a necessary first step; however, it regrets that it does not go far enough.
"The power concentration in the food chain is increasing, and farmers, workers, SMEs and consumers are the ones to suffer the most. It is not enough to adopt a minimum harmonisation approach. We need an EU legal framework banning all abusive practices", reiterated Peter Schmidt, the rapporteur of the opinion. This is a recommendation that the EESC already put forward in a previous opinion. The EESC also points to some abusive practices that the Commission fails to deal with in its proposal. Furthermore, agricultural non-food products and feed also need to be covered by the legislation.
"We welcome the Commission proposal to create an EU harmonised framework of enforcement authorities. However, the enforcement mechanisms should be much stronger and the protection of the anonymity of the complainant should be ensured ", notes Mr Schmidt. For example, enforcement could take the form of a specific ombudsman procedure, class action and law enforcement by the authorities. To facilitate the complaint process, written contracts should be mandatory and would bring more fairness in the negotiations.
Another of the EESC's criticisms relates to the scope of protection. "We consider it necessary to extend the protection to all operators – large and small, both within and outside the EU. This is because we believe that, even when large operators are victims of UTPs, the pressure will inevitably be passed on to the weakest actors in the chain", explains Mr Schmidt.
For the EESC, moreover, the fact that food is sold below cost-prices is unacceptable. "We want an effective ban on the sale of goods below the cost of production in the food trade", stressed Mr Schmidt. "Producers, like farmers, need to be paid a fair and just price. They should receive an income that is adequate for investment, innovation and sustainable production."
Fairer trading practices should be part of a comprehensive food policy, ensuring that the food supply chain is more economically, socially and environmentally sustainable. This is necessary to promote the value of food and to achieve the UN Sustainable Development Goals (SDGs).Business models that increase farmers' bargaining power should be encouraged, for instance by fostering the development of localised food systems and thus establishing closer links between producers and consumers.