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A perspective of the food supply chain

A perspective of the food supply chain. EP workshop on "relations along the food supply chain", 19 June 2012. Philippe CHAUVE Head of the Food Task Force DG Competition 19 June 2012. The views expressed in this presentation are personal and do not commit the European Commission.

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A perspective of the food supply chain

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  1. A perspective of the food supply chain EP workshop on "relations along the food supply chain", 19 June 2012 Philippe CHAUVE Head of the Food Task Force DG Competition 19 June 2012 The views expressed in this presentation are personal and do not commit the European Commission

  2. A few issues and ideas thereabout Prices Value-added in the chain Who is behaving badly? The farmers’ position Unfair trading practices Main sources: ECN report and Task Force’s own investigation

  3. Agricultural commodity Price developments

  4. Consumer Price developments

  5. Consumer Price developments

  6. What drives prices (source « ECN food report », monitoring and antitrust actions by Competition Authorities) • Demand or supply characteristics and variations: e.g. Irish groceries, Italian fruit and vegetables, beer in UK and Latvia. => prices arenot necessarily the result of anti-competitive behaviour • Weakened competition: e.g. Bulgarian, Danish, Latvian and Lithuanian dairy processors • Competition law infringements, about 50 cartels in 2004-2011: e.g. cartels of millers, bakers or pasta producers in the cereals chain, cartels of poultry producers and of egg producers .

  7. 100%= 476 bio € 522 bio € 537 bio € Food retail 27% 28% 30% Food wholesale 11% 11% 13% Food industry 31% 31% 33% Agriculture 31% 29% 24% 1995 2000 2005 Distribution of value added in the EU-25 food supply chain (1995-2005)

  8. Consumption of processed and non-processed food

  9. Consumption of processed and non-processed food

  10. Price transmission : the Dutch NCA analysis on 2005-2008 • Levels with the highest number of cases in the food sector: processing and retail

  11. The enforcement record 2004-2011 • Levels with the highest number of antitrust cases in the food sector: processing and retail

  12. What about the farmers’ position? • Unequal bargaining power is a fact identified by NCAs in many markets in the first level, sometimes further downstream: e.g. for milk producers /dairies in Bulgaria, France, Hungary and Romania, bakeries / retailers in Latvia • Pro-competitive consolidation on the primary production level is the way forward =>A key element of the CAP reform

  13. What about « unfair trading practices »? • Many NCAs investigated them • Few cases under national competition law, essentially about retailers in three member states • most instances do not harm consumer welfare=> not a competition issue • some NCAs question the impact on innovation and choice => Follow-up: self-regulation under the HLF, a Commission communication, investigations by competition authorities

  14. Thank you!

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