x You may want to reassure EuroCommerce that
DG AGRI does not
target retailers specifically but works to improve the functioning of the
EU’s food supply chain as a whole, which includes current and future
initiatives.
x You can take note for EuroCommerce’s views
on the Farm to Fork
Strategy and
explain the expectations of the Commission regarding the
role of all stakeholders in the food supply chain, but also assure them that
all initiatives will seek the feedback of stakeholders and be subject to
better regulation procedures.
Personal data
, DG AGRI, Unit G1, Personal data
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DEFENSIVES
EuroCommerce is concerned that Member States will go beyond the Directive
and protect large manufacturers beyond the EUR 350 million threshold. This
would tip the contractual balance in favour of the food industry, as retailers
are not protected by the Directive.
x Member States can, based on Article 9 of the Directive, go beyond the
Directive, as long as the measure is compatible with the internal market
rules.
EuroCommerce is concerned – and has seen cases – that Member States will
use the transposition of the Directive to impose territorial supply constraints
or restrictions.
x The Commission will fight any fragmentation of the internal market and not
allow Member States to use UTP transposition laws for that purpose. You
could already witness this in the beginning of the Covid-19 pandemic,
where the Commission acted decisively against any attempts to
compartmentalise the internal market. Article 9 of the Directive is clear:
measures by Member States have to comply with the internal market rules.
EuroCommerce is concerned that the JRC baseline survey does not take the
view of retailers into account, which could also be subject to UTPs from
suppliers.
x The baseline survey should feed into the evaluation of the impact of the
Directive in 2025. As you know, the Directive does not protect retailers, as
the agricultural legal basis of the Directive protects weaker suppliers.
Consequently, the survey addresses
suppliers protected by the Directive.
But that is not logical, as the survey also addresses suppliers above EUR 350
million. These big suppliers are also not covered by the scope of the Directive.
Why did you include these and not retailers
x Some MS today protect a wider range of suppliers, so it was decided to
gather more broad ranging information. The baseline survey also goes
beyond the Directive by integrating a question on Covid-19.
x However, for the purposes of the evaluation of the Directive, filters will be
used on the responses to precisely identify the suppliers who are covered by
the Directive (i.e. only suppliers below the threshold of EUR 350 million)
EuroCommerce is afraid that some suppliers give a distorted picture of the
UTPs. How can we make our views known?
x JRC is very experienced in conducting surveys and has methodological
tools to ensure that no biases occur.
The survey is just one element in the evaluation process; the Commission
will rely on other sources, in particular the annual report of Member States,
as stated in the text of the Directive.
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How can EuroCommerce make its views known, if not through the survey?
x The fact that retailers are not part of the survey does not mean that retailers
cannot make your view known.
We are talking right this moment, and
you and your members individually follow a constant dialogue with my
services, which will continue. My services are happy to listen to your views.
Won’t increased market transparency compromise confidentiality and
facilitate anti-competitive practices in the food supply chain?
x The risk of anti-competitive practices only arises where operators in the FSC
can discern individual firm price data.
x There are already provisions in place in existing legislation that address this
concern, namely that data has to be published in a sufficiently aggregated
form so as to prevent identification of any one operator.
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BACKGROUND
The
Directive on unfair trading practices in business-to-business relations in the
agricultural and food supply chain entered into force in April 2019
x It has to be transposed into national law by
1 May 2021.
x It has to be applied to agri-food sales in B2B relations by
1 November 2021.
A Europe that protects - The Directive is a first-time EU law providing significant
protection for all EU farmers, their organisations as well as small and mid-range businesses.
The JRC and DG AGRI are currently asking suppliers what is the current occurrence of
UTPs, via an
online survey. This will form the baseline upon which the performance of the
UTP Directive will be assessed in the future.
The key elements of the Directive are:
x Protection of
weaker suppliers against stronger buyers. Only suppliers of a turnover
below EUR 350 million are protected.
x Limited to agri-food products
x List of
16 targeted UTPs which are prohibited, 10 black listed, 6 grey listed UTPS that
are only allowed if they have been agreed by the supplier and buyer beforehand.
x Enforcement by
designated enforcement authorities with investigation powers and
the power to terminate infringements and to levy penalties, i.e.
fines.
x Protection of the
identity of the complainant to cater for the fear factor
x The Directive will protect any supplier of agri-food products with a turnover of up to
EUR 350 million with differentiated levels of protection. This covers not only farmers,
but also producer organisations and food industry below the threshold.
x Buyers who are stronger than the supplier, i.e. in a higher turnover category as defined
by the Directive, are prohibited from applying UTPs to their suppliers.
x
Retailers are not protected – and could not be – as the Directive is based on an
agricultural legal basis of the Treaty, which does not allow to protect just any operator
in the chain, the focus is on farmers.
x National rules can be more ambitious, Article 9 of the Directive. MS can go beyond
the Directive, e.g. protect all suppliers, also these with a higher turnover than EUR
350 million or they can introduce more unfair trading practices which they want to
prohibit. However, such measures cannot distort the internal market, so no hidden
import restrictions by claiming that this is covered by UTP law!
x Member States will have to designate authorities in charge of enforcing the new rules,
including the ability to impose fines and initiate investigations based on complaints.
x The Directive protects the confidentiality of complainants thereby addressing the
complainant’s fear about retaliation from the buyer.
x The Commission will set up a coordination mechanism between enforcement
authorities to enable the exchange of best practice. This will happen in due course
once Member States designated enforcement authorities.
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Market transparency
x Improvements in market transparency and more equal access to information put
agricultural producers and food SMEs in the food supply chain on a more equal
footing with their larger counterparts.
x A new Implementing Regulation (EU) 2019/1746 was adopted in 1 October 2019 and
will
apply from 1 January 2021. It amends Implementing Regulation (EU)
2017/1185 on reporting requirements on agricultural products.
x The legal amendments increase transparency in key sectors (meat, dairy, fruit and
vegetables, etc.) and, crucially,
along the length of the food supply chain, for buying
and selling prices and certain quantities.
x This increase in market transparency is
one of three elements of a package to improve
the functioning of the food supply chain, the two others being the Directive on unfair
trading practices and improvements to the rules for producer cooperation.
x Agri-food sector is
increasingly market-oriented and integrated into global markets.
There are frequently high levels of market concentration downstream from farmers.
Having market information on which to act upon is thus of increasing importance for
food supply chain operators.
x The new market transparency rules increase transparency in the stages along the chain
between farmers and consumers, where information is currently scarce, namely at
food industry and retail level.
x This initiative focuses on price and quantity data, but does not include increased
transparency on operator costs and margins or other structural aspects of the food
supply chain, as we consider this would entail at EU level higher costs than expected
benefits.
x The new rules will
help farmers and other smaller operators understand markets
better, and
build trust between smaller and larger operators by promoting fact-based
discussions.
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DEFENSIVES
Question: Will you take legislative action on retail alliances?
x The JRC report concluded that competition law and the UTP Directive are
adequate tools to deal with potentially unfair treatment of retail alliances.
We do not see any need for legislative action at this time.
x My services recently presented the report to COMAGRI with this
message. The political groups stated that they will discuss among
themselves.
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BACKGROUND
In the adoption process of the UTP Directive, the European Parliament asked the Commission
to analyse buying alliances.
Statement by the EP to the Commission in the adoption process
The European Parliament, while acknowledging the possible role played by alliances of
buyers in creating economic efficiencies in the agricultural and food supply chain,
stresses that the current lack of information does not allow for an evaluation of the
economic effects of such alliances of buyers on the functioning of the supply chain.
In this regard, the European Parliament calls on the Commission to launch without delay
an indepth analysis on the extent and effects of these national and international buying
alliances on the economic functioning of the agricultural and food supply chain.
Following a workshop in November 2019, a report by the JRC (May 2020) concluded that
retail alliances are able to generate benefits for retailers that increase their competitiveness.
According to the report, there is no current reason for the EU to legislate in this area.
Still, further analyses may be conducted on the upstream effects of retail alliances
Please see too the
Power Point presentation given to COMAGRI on the report, attached.
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o ensuring that food price campaigns do not undermine citizens’ perception
of the value of food, and
o reducing packaging in line with the new Circular Economy Action Plan.
x
The Commission appreciates retailers’ initiatives to decrease the salt,
sugar or fat content in their own ‘private label’ products, as well as their
efforts to encourage consumers to eat more fruit and vegetables.
x The Commission will revise
marketing standards to provide for the uptake
and supply of sustainable food products and to reinforce the role of
sustainability criteria.
x DG AGRI aims to publish an inception impact assessment for the revision of
marketing standards soon, and all
stakeholders will have ample
opportunities to provide their feedback, also during the remaining impact
assessment process.
x
The Commission welcomes the progress wholesalers and retailers made
in reducing food waste and it understands that the sector is responsible for
only a relatively small share of total food waste; it nevertheless welcomes
the sector’s continued efforts to further reduce waste, to encourage
consumers to do likewise, and to use products that have lost their
commercial value.
x
The Commission will create a sustainable labelling framework that
covers all relevant aspects of food products and it will examine ways to
harmonise ‘green’ claims to ensure a level playing field across the internal
market, reduce consumer confusion, and address possible first-mover
disadvantages for more sustainable operators.
x In this context, the Commission welcomes the sector’s readiness to embrace
digital technology (e.g. blockchain) to
provide more reliable information
and facilitate traceability, which requires coordination along the chain.
x The Commission likewise welcomes the sector’s understanding of the
importance of affordable food prices for many families; improving the
efficiency of the food supply chain is one of the key objectives of DG AGRI.
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DEFENSIVES
We do not agree with certain actions or approaches in the Farm to Fork
Strategy.
x As is stated in the Farm to Fork Strategy,
all planned actions and measures
will be taken forward in line with better regulation principles; this
includes impact assessments and the consultation of stakeholders and the
public at large.
x
I invite you to raise your concerns also during the consultation. DG
AGRI considers you a key stakeholder.
There are issues in the food supply chain between the food industry and
retailers that you do not address.
x DG AGRI can only act in line with its legal basis (Article 39 TFEU), which
only in limited circumstances extends to the relationship between
downstream operators in the food supply chain. I invite you to take this issue
up with my colleagues in DG GROW or in DG SANTE.
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BACKGROUND
x See EuroCommerce’s Position Paper on the Farm to Fork Strategy in the Annex.
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