Currently most farmers and agricultural enterprises are facing unaffordable increases in production costs, and these extra costs are not being compensated for through the prices paid to farmers by the buyers of agricultural products, notably large-scale distribution companies. This threatens the survival of many farms, has serious implications for the food supply chain in the EU and will exacerbate the problem of trade balances, with a need for more imports and dependence on volatile foreign markets.

The growing power of large retail groups in particular is perceived to result in reduced bargaining power for producers, meaning that low prices are paid to producers for agricultural raw materials while high prices are paid by consumers for foodstuffs.

In this context what action does the Commission envisage with respect to the following key challenges?

1. The need to ensure fairness in the relations between distributors and suppliers.

2. The need to tackle abuses in the food supply chain.

3. The need to undertake a proper analysis and make available reliable information on food prices across the EU to ensure transparency.