Unequal Relationship between Grocery Multiples & Producers
“Today the European Parliament sent a strong message to the Commission on the need for framework legislation to tackle unfair practices in the food supply chain. This will help to ensure that both European farmers and consumers have the opportunity to benefit from fair and equitable selling and buying conditions”. This was stated by Marian following a vote in the European Parliament on ‘unfair trading practices in the food supply chain’.
“This statement by the European Parliament will be welcomed by many farmers in Ireland who see themselves as price takers, not price makers. There are very significant imbalances of power along the food chain and this situation is often compounded by unfair trading practices.
“Some of these practices include payment delays, unilateral changes to contract terms, refusal to conclude a written contract, forced involvement in in-store promotions, imposing unconditional return of unsold products and exerting pressure to cut prices.
“A significant number of EU Member States have put regulations in place to deal with the issue of unfair trading practices and others are planning to do so. Self-regulatory schemes do not work in many cases. We have the situation where those in a weak position economically will not take action against those in a dominant position because of fear of a backlash or indeed the ending of their commercial relationship. This ‘fear factor’ means that abuse of power is more likely to prevail and many small traders and primary producers simply put up and shut up.
“In Ireland we have very weak regulation in the guise of the Grocery regulation but it is of no assistance to small producers. All calls to successive Irish Ministers to introduce regulation has fallen on deaf ears so at least if we could introduce regulation at European level it would provide some protection for Irish producers and help stamp out unfair practices in the food supply chain”.