Retailers' abusive practices are hastening the decline of the agro-food sector. A distorted market affects consumers as well as suppliers. On 13 February, the European Economic and Social Committee (EESC) endorsed an opinion to put an end to these dramatic shifts which are exacerbated by the economic crisis.
"It is a fact that a handful of retailers control most of the market and impose their own terms on suppliers. Contractual freedom is a notion that exists only on paper. This is an illegal oligopoly which is causing a distortion of the market, with a widespread abuse of buyer power. The EESC wants to put a stop to this situation", says Igor Šarmír (Employers' Group, Slovakia), rapporteur of the EESC opinion on the Large retail sector.
Even though the Commission set up a High Level Forum for a Better Functioning Food Supply Chain, the stakeholders in the agro-food chain have been unable to agree on basic principles for combating disloyal practices. Self-regulation has not worked at either EU or national level. The EESC therefore calls for a binding legal text to be drafted as a matter of urgency, for fair competition to be encouraged and for action to be taken against illegal oligopolies.
The abusive and anti-competitive practices which large retailers impose on their food suppliers reflect a lack of any real contractual freedom. As a consequence, the inability of certain suppliers to meet the requirements of large retailers and the resulting economic difficulties are contributing to the decline of the agro-food sector in several countries. Certain Member States, which were once self-sufficient in terms of foodstuffs, now no longer enjoy food security.
According to market share statistics, 84% of European suppliers to the large retail sector were victims of a breach of contract in 2009, 77% were threatened with product delisting unless they gave the supermarkets unjustified benefits, 63% saw a reduction in their invoice price for no valid commercial reason, and 60% were forced to make payments for which they received nothing in return.