Finnish Commerce Federation welcomes the opportunity to comment on the Inception Impact Assesment (IIA) on the initiative to improve the food supply chain. Our full position paper on the IIA is attached.
To summarize our statement, we would like to raise the following points:
We understand the difficulties farmers face and agree that farmers are crucial for the food supply chain. The IIA fails to identify what Commission is actually trying to achieve and to what extent the proposed actions would help the farmers. The political debate focuses on producer prices, “fair” value distribution within the supply chain and is addressing especially retailers’ practices. Retailers typically have few direct relationships with farmers. If the main purpose of the initiative is strengthening farmers’ position, addressing retailers’ contractual practices won’t deliver this objective.
We believe that the contractual relationships of the food supply chain can be best developed through self-regulation in the chain. In Finland, a self-regulation system based on Supply Chain Initiative (SCI) has been in use for a long time already, and retail is strongly committed to developing trading practices through this system. Regulating contracts in the food chain on European level would only add enormous administrative burden to companies, both big and small, in every stage of the food chain.
We have serious doubts as to how EU level legislation on unfair trading practices could either help increase disposable farm income an investment possibilities or facilitate business activity in the EU Single Market as stated in the IIA. We are concerned about the compliance cost of legislation for businesses at all levels of the chain, from farmers to retail. We would ask the Commission to duly assess this.
The IIA also fails to identify the consumer interest, which is central for the functioning of the food supply chain. Any policy action to be taken must ensure that consumers are the final beneficiaries. Added bureaucracy to the supply chain and new derogations from the competition provisions to agricultural sector would hardly accomplish this. On the contrary, there should be minimal number of legal derogations from EU competition law in the agricultural sector.
Especially Commission should consider to what extent internal market issues arise from different national regulations and schemes and how the suggested measures will help address market fragmentation. So far no evidence has been provided to show that any possible unfair trading practices in some individual country or other might affect trade between the Member States.
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