A perspective of the food supply chain

Philippe CHAUVEHead of the Food Task ForceDG Competition19 June 2012

EP workshop on "relations along the food supply chain", 19 June 2012

The views expressed in this presentation are personal and do not commit the European Commission

A few issues and ideas thereabout

Prices Value-added in the chain Who is behaving badly? The farmers’ position Unfair trading practices

Main sources: ECN report and Task Force’s own investigation

Agricultural commodity Price developments

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EU27-Food EU27-Bread and cereals EU27-Meat

EU27-Milk EU27-Cheese EU27-Oils&Fats

EU27-Fruit EU27-Vegetables EU27-Sugar, jam, honey, chocolate, confectionary

Consumer Price developments

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EU27-Food EU27-Bread and cereals

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EU27-Oils&Fats EU27-Fruit

EU27-Vegetables EU27-Sugar, jam, honey, chocolate, confectionary

Consumer Price developments

What drives prices (source « ECN food report », monitoring and antitrust actions by Competition Authorities)

Demand or supply characteristics and variations: e.g. Irish groceries, Italian fruit and vegetables, beer in UK and Latvia. => prices are not necessarily the result of anti-competitive behaviour

Weakened competition: e.g. Bulgarian, Danish, Latvian and Lithuanian dairy processors

Competition law infringements, about 50 cartels in 2004-2011: e.g. cartels of millers, bakers or pasta producers in the cereals chain, cartels of poultry producers and of egg producers .

Distribution of value added in the EU-25 food supply stribution of value added in the EU-25 food supply chain (1995-2005)chain (1995-2005)

31% 29% 24%

31% 31%33%

11% 11% 13%

27% 28% 30%

1995 2000 2005

Food retail

Foodwholesale

Foodindustry

Agriculture

100%= 476 bio € 522 bio € 537 bio €

Consumption of processed and non-processed food

Consumption of processed and non-processed food

Price transmission : the Dutch NCA analysis on 2005-2008

Levels with the highest number of cases in the food sector: processing and retail

The enforcement record 2004-2011

Levels with the highest number of antitrust cases in the food sector: processing and retail

What about the farmers’ position?

Unequal bargaining power is a fact identified by NCAs in many markets in the first level, sometimes further downstream: e.g. for milk producers /dairies in Bulgaria, France, Hungary and Romania, bakeries / retailers in LatviaPro-competitive consolidation on the primary production level is the way forward

=>A key element of the CAP reform

What about « unfair trading practices »?

Many NCAs investigated them Few cases under national competition law, essentially

about retailers in three member states most instances do not harm consumer welfare=> not

a competition issue some NCAs question the impact on innovation and

choice

=> Follow-up: self-regulation under the HLF, a Commission communication, investigations by competition authorities

• Thank you!