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Improving the functioning of the food supply chain

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Every day, numerous operators (EU and non-EU) of the food supply chain deliver safe and diverse foodstuffs and beverages to over 500 million European consumers, representing an average of 15 % of household expenditure.

"This work is an example of how bringing together all sectors working around the food chain can produce results and show the direction for future policy in this area. We are particularly pleased with the engagement that all members of the Forum have demonstrated to come up with solutions for a sector that is vital to the EU economy. Stakeholders have demonstrated their commitment to improve the efficiency and competitiveness of the food supply chain. We regret that no agreement has yet been reached on business-to-business unfair trading practices but believe that this can still be done. Stakeholders should maintain an active and committed endeavour to conclude an agreement in the field of business-to-business unfair trading practices. We aim to achieve clarity on the way forward by the autumn of next year. Our objective is to promote confidence throughout the food chain to the benefit of all - producers, manufacturers, retailers and consumers."

The agro-food sector is a vital economy driver in the EU which encompasses 17 million enterprises in agriculture, the food processing industry and related services. The High Level Forum for a Better Functioning Food Supply Chain, established in 2010, has presented its report today. It shows that around 80 % of the initiatives contained in the Forum's Roadmap have been satisfactorily implemented.

The Forum looks forward to a consensus yet to be reached on the best way to implement the principles of good practice put forward last year to improve business-to-business relationships (IP/11/1469). All parties showed their clear willingness to continue discussions in a constructive way and the Commission encourages stakeholders to put forward a satisfactory solution at the earliest opportunity.

In parallel the Commission will assess all possible options for tackling unfair trading practices in the food chain, including legislation, and will launch an impact assessment.

Progress achieved in several fields

Business-to-business contractual practices, competitiveness of the agro-food industry and food prices monitoring were the three main pillars along which the holistic work of the Forum was structured. Today's report highlights the progress achieved so far:

12 initiatives are fully achieved. These include:

  • EU legislative acts: the Directive on industrial emissions; adoption of revised rules of origin and implementation of all aspects of the Small Business Act SBA review;

  • Initiatives now following their own work programme: the EU Social Dialogue Committee, the Food Sustainable Consumption and Production Round Table;

  • Working procedures: competitiveness proofing, continued publication of annual calls related to food research;

  • Regular exchange of information and good practice in Europe: Food chain benefitted from European competition rules (IP/12/502), the HLG on logistics made progress; actions in international fora are ongoing (e.g. actions to promote the uptake of international standards); food information and education have been advancing significantly both at legislative as well as at the level of voluntary initiatives, including awareness and education tools and studies;

  • Identification of most important trade barriers for EU food exporters: Free trade agreements with South Korea and Morocco, extension of regulatory dialogues, continued participation of the food sector to Missions for Growth (MEMO/12/920).

For 14 initiatives there have been major advances, but more needs to be done to reap their benefits. This includes for instance legislative acts which are currently under legislative procedure or need to be implemented (e.g. the review of the Markets in Financial Instruments Directive, food information to consumers); significant progress made in several Member States but not all of them (e.g. on the development of food prices observatories).

For the remaining 6 initiatives significant progress is still needed. In most cases, work is on-going but further actions still need to be taken either by EU institutions (e.g. on novel foods) or by national authorities and private stakeholders (e.g. on national organisations to report on geographical indication counterfeiting). Progress may reasonably be expected in the near future on several initiatives, though there is one exception: delays in the Doha Development Agenda make it unlikely that an ambitious global trade agreement will be reached soon.

Work to be continued

The Forum recommended maintaining a multi-stakeholder dialogue on priorities such as, the follow-up to the on-going pilot project on a fitness check for the food supply chain; the improvement of the European Food Prices Monitoring Tool and further initiatives as the flagship initiatives of the Europe 2020 Strategy.

Important economic role of food sector

The agri-food sector plays a central role in the Union economy, society and environment. It is a complex supply chain, which encompasses agriculture, the food processing industry and related services. Taken as a whole, it generates value added of € 715 billion per year — almost 6 % of the EU Gross Domestic Product. Around 17 million holdings and enterprises (82 % of them agricultural holdings), many of them small, are involved, providing jobs to over 48 million Europeans. The food processing industry is the first manufacturing sector in the EU in terms of value added and employment.

Moreover, the EU is the world’s biggest exporter and importer of agricultural and food products, and accounts for about 19 % of total global export flows. However, the EU food sector’s competitive leadership is increasingly being challenged by established trade partners (USA, Australia, New Zealand) and by emerging economies (Brazil, China).

Background

The European Commission established the Forum in 20101 (IP/10/1510) to assist the Commission in supporting sustainable competitiveness and growth in the European agro-food supply chain. It provides advice to the Commission in the implementation of its Communication ‘A better functioning food supply chain in Europe’ (COM(2009) 591).

The Forum comprises 45 members representing a number of Member States, European companies dealing with food production, processing or distribution, professional associations and non-governmental organisations representing citizens’ interests. It is chaired by European Commission Vice President Antonio Tajani together with his fellow Commissioners Michel Barnier (Internal Market and Services), Dacian Cioloş (Agriculture and Rural Development) and Tonio Borg (Health and Consumers). Its mandate expires on 31/12/2012.

http://ec.europa.eu/enterprise/sectors/food/competitiveness/forum_food/index_en.htm

MEMO/12/941

 

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