Agriculture and Food
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.
The Commission has received many complaints that food retailers and food manufacturers have become more concentrated in the past decade and that they are using the resulting increased bargaining power to the detriment of their smaller trading partners.
According to such complaints, the higher bargaining power of retailers had a negative impact on investment in the food supply chain, resulting in less choice for consumers and fewer innovative products.
Modern retail study
The Commission (DG Competition) launched its "modern retail study" to examine whether increased concentration (of food retailers/food brand manufacturers) or other factors (such as shop type/size, private label penetration, socio-demographic characteristics) have affected choice and innovation for the consumer in European shops. This study assessed how concentration and potential imbalances between retailers and brand manufacturers have been developing in the EU food supply chain over the last decade.
Please note that the DG Competition's modern retail study has been revised since the conference on 2 October 2014 and that a new version is now available on the website en fr . The new version of the report updates the results on the relationship between private label penetration and choice/innovation following refinements made to the econometric analysis.
Press release - Speech by Director-General Alexander Italianer - Presentation
Executive summary of the retail study (FR version, the EN version is included in the study) fr
The study also includes six additional case studies which analyse the supply chain and the evolution of choice and innovation for certain agricultural products in several EU countries: tomatoes, apples, olive oil, milk, cheese and pork meat.
Follow-up on retail issues
The Commission is looking forward to hearing the views and comments of those interested in the study, its results and possible follow-up. All submissions should be made to COMP-E-TF-FOOD@ec.europa.eu, before 30 January 2015.