Retail alliances in the spotlight as EU backs tougher enforcement on unfair trading practices

Fairness shouldn't stop at national borders. Today, the European Parliament's Agriculture Committee has taken a vital step toward cracking down on unfair trading practices, with their report backing stronger cross-border enforcement to stop hyper-consolidated European retail alliances from exploiting legal loopholes at the expense of food and drink makers.

The proposed rules, particularly the introduction of a mutual assistance mechanism, will help strengthen cross-border enforcement of the UTP Directive across the agri-food supply chain and help close current enforcement gaps, especially in cases involving large European retail alliances.

As rightly highlighted by the AGRI Committee, large retail alliances - which have spread across Europe in recent years - 'have an inherent cross-border purchasing strategy and might circumvent certain legal provisions, even when the acquired agricultural and food products are intended for the market of the Member State of the supplier.'

Large retail alliances are among the most likely to impose unfair cross-border practices on suppliers like farmers and food and drink makers, including even on companies with an annual turnover exceeding €350 million. A study by Wageningen University & Research shows that in 2023, the four largest retailers held 60% of the market share in all EU Member States bar one. In addition, an internal FoodDrinkEurope survey confirms that 75% of food and drink companies have to negotiate through large retail alliances in order to get their product on the supermarket shelf - this high level of consolidation disproportionately strengthens retailer bargaining power over farmers and food and drink makers.

Unfortunately, the current proposal, though markedly improved by today's adoption of the AGRI Committee report, still leaves the door open to 'forum shopping' strategies by retail alliances, by which they choose to establish themselves in those Member States where suppliers with a turnover above €350 million are not protected against unfair trading practices. This lack of protection indirectly affects thousands of farmers who supply them.

That's why, given these persistent imbalances in the food chain, FoodDrinkEurope supports the AGRI Committee's position to amend the UTP Directive, to include an extension of its scope to ensure that all food and drink makers - regardless of size - are protected against unfair trading practices. This is essential for ensuring a balanced, fair and resilient agri-food chain in the years ahead.

FoodDrinkEurope urges MEPs to adopt the draft report in plenary, as approved by the AGRI Committee.