EuroCommerce has called on the ministers to be clear on some vital issues:
The commerce sector supports any initiative aimed at building a competitive and profitable agricultural sector. EuroCommerce welcomes the commission’s efforts to analyse and understand the situation of the dairy market.
We welcome the recognition that multiple factors explain why consumer prices have remained stable, while ex-factory prices and prices for raw milk – which only account for one third of the price of dairy products to the consumer – have decreased. However, these factors would be better identified through an in-depth analysis of the supply chain as a whole, which takes into account the worldwide demand for raw milk.
We ask the council to bear in mind that, as regards milk collection and dairy processing, there is a situation of dominance in many EU markets, as for example in Sweden and in Denmark, where one company controls 90% of the market.
Another example is the situation in the Netherlands, where further to a recent merger, almost 90% of Dutch farmers are now subject to the power of a quasi-monopoly. Such dominance limits choice of supply for retailers, thus restricting their ability to negotiate prices.
“It has at last been recognised that a proper understanding of price developments takes more than an examination of retail prices alone,” said Xavier Durieu, secretary general of EuroCommerce. “It requires a clear understanding of price transmission mechanisms and practices along the entire supply chain and of the global market price of milk. To identify only one sector as responsible for the entire situation cannot serve the interests of business or consumers. We call on the Agriculture Council to act on this understanding.”
EuroCommerce recalls its opposition to recommendation No 15 of the High Level Group. The commerce sector supports a more competitive and efficient supply chain to the benefit of consumers, and strong competition among retailers keeps profit margins (very) low in this sector.
“However, it must be recognised that market power is integral to a market economy and is exercised not only along the food supply chain but also in all other economic sectors,” said Durieu. “There’s no reason why the food supply chain should be treated differently. Retail markets by nature tend to be national with differing legal, economic, political and cultural characteristics. In light of the current already stringent safeguards at national level, no code of conduct is needed or desirable at European level.”
Source: EuroCommerce
© FoodBev Media Ltd 2024