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Commission adopts a communication on a better functioning food supply chain in Europe

Concrete actions to improve relationships between actors of the food supply chain.

Why this Communication on the food supply chain?

Recent food prices developments have raised concerns on the functioning of the European food supply chain. The sharp decline in agricultural commodity prices of 2008 has failed so far to fully translate into lower food prices at producer and consumer levels.

The food supply chain is a major contributor of the European economy, connecting sectors – agricultural, food processing industry and distribution – that together make more than 7% of European employment. These sectors have a direct impact on all European citizens, since food represents on average 16% of households' expenditures.

Staff working documents (SWDs)

Affordable high quality food products are essential

It is thus essential that the European food supply chain functions well to provide quality and safe food products at affordable prices. This is all the more important since maintaining European households' purchasing power is a priority in the path towards recovery from the current economic and financial crisis.

This Communication follows up on Communication COM(2008) 821 Food prices in Europe" of December 2008 and marks the end of a 2-year market monitoring exercise on the food supply chain in Europe.

Current problems within the food supply chain

The Communication identifies significant tensions in contractual relations between actors of the food supply chain, stemming from the diversity of actors active in the chain and their differences in bargaining power.

The Communication also highlights the lack of transparency of prices along the food supply chain as well as the increased volatility of agricultural commodity prices. Finally, it acknowledges that the internal market for food is still fragmented across products and Member States.

Commission proposals to improve the food supply chain

To overcome these challenges and improve the functioning of the food supply chain, the Commission proposes to:

  • Promote sustainable and market-based relationships between stakeholders of the food supply chain:
    the Commission, together with Member States, will foster improved contractual relationships between the actors of the chain and will closely monitor potential competition issues in sectors of the chain;
  • Increasetransparency in the food supply chain:
    the Commission publishes today a European food prices monitoring tool, available to the public. It also calls for the development of food retail price comparison services by Member States and proposes actions to increase the oversight of agricultural commodity derivatives markets, with a view to containing volatility and speculation;
  • Foster the integration of the internal market for food and the competitiveness of all sectors of the food supply chain:
    the Commission will in particular review selected environmental standards and origin labelling schemes that may impede cross-border trade. It will also assess measures to address the practices of territorial supply constraints by which suppliers "force" retailers to source locally.