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Agriculture and Food

Overview

EU competition rules apply, with certain exceptions, to the agricultural sector: to farmers, associations of farmers, producer organisations, cooperatives, and interbranch organisations, among others.

The sector-specific rules can be found in Regulation 1184/2006 and Regulation 1308/2013, known as the "Common Market Organisation (CMO) Regulation".

Agriculture is changing rapidly due to globalisation and technological innovation. The reform of the Common Agricultural Policy (CAP) took place in 2013. The reform modified the competition rules' application to the agricultural sector. It introduced new derogations based on efficiencies for joint negotiations through producer organisations in the olive oil, beef and veal and arable crops sectors, a new derogation for agreements in situations of extreme crisis that have not been remedied by public intervention, and some specific derogations.

Regarding the producer organisations in the olive oil, beef and veal and arable crops sectors, they may negotiate, on behalf of their members, contracts for the supply for the delivery of some or all of their production. In others words producers may jointly negotiate their products but to benefit from this derogation they need to meet certain conditions. In particular the producer organisation which commercialises the products must integrate activities that are likely to create significant efficiencies. These efficiencies would ensure that the activities of the Producer Organisation contribute overall to the fulfilment of the objectives of the CAP (as defined in Article 39 of the Treaty on the Functioning of the European Union). The Commission has announced (MEMO/13/621 ) that it will publish guidelines on the implementation of this derogation. In this context the Commission has commissioned a report defining and assessing the efficiencies generated by producer organisations in the agricultural sectors. The report gives (i) a review of the existing empirical literature from the European Union and the United States that focuses on the role of producer organisations in increasing productivity, increasing farmers´ incomes and ensuring reasonable consumer prices and (ii) case study evidence on producer organisations in the beef and veal sector in Poland, and on producer organisations in the arable crop sector in Rumania.

One of the CAP's aims is to keep effective competition on the markets for agricultural products.  This would help fulfil the five goals of the CAP according to the Treaty (Article 39 TFEU):  increasing agricultural productivity, ensuring a fair standard of living for the agricultural community, stabilising markets, assuring availability of suppliers and ensuring reasonable prices for consumers.

The European Commission's competition department works to ensure that all legislative proposals contribute to making agricultural markets more competitive, and will not have anti-competitive effects. It further works on guidelines to clarify the application of competition rules in the sector.

The Competition department also enforces the competition rules that prohibit restrictive agreements and abusive conduct by dominant companies on agricultural markets, in parallel with national competition authorities. The Commission has also adopted a number of decisions relating to mergers in the agricultural sector.

The Commission’s department for competition does not deal with state aid in the agricultural sector. This is handled by the department for agriculture, which is active in the control of state aid to the production, processing and marketing of agriculture products.

Recent advocacy actions in the agriculture sector focused on measures proposed by the High Level Group on Milk to limit competition in milk markets. This included a brochure which explains how co-operation between farmers can be strengthened without the need for derogations from competition rules. More recently, the European Competition Network (ECN) has published a Report on the activities of competition authorities in the food sector. The report provides detailed information and findings on how competition works in the food sector on the basis of the most recent enforcement and monitoring actions undertaken by national competition authorities and the Commission in this area.

Retail study

The European Commission has ordered a study to assess the impact of recent developments in the European retail sector on consumers. Following calls by stakeholders, the study will examine, in particular, whether increased concentration (of retailers/food manufacturers) or other factors (such as shop type/size, private label success, socio-demographic characteristics) have hampered choice and innovation in the European food supply chain.

DG COMP is pleased to announce that the final results of the retail study will be presented during a conference hosted by DG COMP in Brussels on 2nd October 2014. The consortium of Ernst & Young, Arcadia International and Cambridge Econometrics, who has prepared the study, will present the main findings of their work. There will also be opportunities to ask questions and react to these findings. The draft agenda can be found here .

DG COMP believes that this conference will launch a useful debate with all stakeholders in the food supply chain. It will be the start of a dialogue on the matters covered and results obtained by the study that will certainly prove relevant for future discussions in many forums.

Participants are asked to confirm their attendance to COMP-E-TF-FOOD@ec.europa.eu

All questions regarding this conference should also be addressed to COMP-E-TF-FOOD@ec.europa.eu.